Businessmirror february 05, 2018

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Monday, February 5, 2018 Vol. 13 No. 117

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Compromise on VAT rate cut seen as a tough task 12 S

By Butch Fernandez

enators belonging to the majority and minority blocs are treading cautiously on a counter offer by the Department of Finance to consider a Senate proposal to reduce the value-added tax (VAT) rate from 12 percent to 10 percent.

The DOF has signaled the reduction could be done provided the number of exemptions is trimmed considerably.

By Elijah Felice E. Rosales

A

@alyasjah

s the Trans-Pacific Partnership (TPP) made significant headway in January, negotiating countries in the Regional Comprehensive Economic Partnership (RCEP) are pressured to conclude the trade deal, and they try to make progress in the ongoing talks in Indonesia.

Trade Secretary Ramon M. Lopez told the BusinessMirror the 16 RCEP negotiating countries are currently finetuning the process and parameters of the proposed agreement. Lead negotiators are in Yogyakarta on the island of Java for the continuation of talks.

According to Lopez, the round in Indonesia is focused on identifying what products will be listed under the sensitive list of each country.

The sensitive list is like a limited list in which the reduction of tariff is longer, or the reduction is not immediate to give the industry the time to adjust.”—Manzano As for the Philippines, Lopez said it will be the “usual agricultural products” that it cannot subject to competition with imports.

Former Tariff Commissioner George N. Manzano said he expects the government to place rice, sugar, garlic and other staple under the sensitive list.

Contnued on A16

New China visa to open opportunities for Filipinos

By Samuel P. Medenilla

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@sam_medenilla

alented Filipinos and ot her mig ra nts in t he fields of science, business, sports and arts can now work in Shanghai under China’s new visa category, according to the Philippine Overseas Employ ment Administration (POEA).

POEA said the China “R” Visa or China Talent Visa will be available to foreign scientists, science

and technology talents, international entrepreneurs and other “high-end talents,” which will be deemed by the Chinese government as “needed for its economic and social development.”

The new visa is free and could be availed of by applicants by accomplishing an online form.

“Shanghai’s Municipal Human Resources and Social Security Bureau [will] assess the visa applicant based on a grading and See “New China,” A16

PESO exchange rates n US 51.4910

What PPP can learn from Tough Mudder Alberto C. Agra

ead

PPPC.LAgra Alberto

However, Senate President Pro Tempore Ralph G. Recto, who authored the expanded VAT law, sees an element of “intellectual dishonesty” in the notion that exemptions can be lifted or taken back from key economic sectors, citing as example business-process outsourcing (BPO).

Y

es! Tough Mudder will come to the Philippines this year, the first in this part of the world. This July and November, TM will be offering to the growing Filipino community of obstacle-sports enthusiasts its mud run obstacle-course challenge.

Pilipinas Obstacle Sports Federation, the national sports association on obstacle sports, defines the sport as one in which a participant or competitor, traveling on foot, must overcome various physical challenges that are in the form of obstacles.

See “VAT rate,” A2

Continued on A15

BMReports

US-version Silk Road: Is PHL ready for Internet’s dark side?

By Rizal Raoul S. Reyes @brownindio

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Part One

EARLY four decades ago, Luke Skywalker rejected Darth Vader’s notion of the Dark Side of the Force. Three decades after The Empire Strikes Back film was released, the Dark Side of the Internet was born.

W h i l e i t ’s u n k n o w n i f Skywalker yielded, many have been lured, especially those in the illegal-drug trade, to the dark side of the Web. This so-called dark side of the Web has given birth to the Dark Web or Dark Net. This is the third dimension of cyberspace, according to cybersecurity experts. The other two dimensions are called Surface Web or Clear Net and Deep Web or Deep Net. Clear Net refers to the domain of casual digital citizens. Any browser can be used to access Clear Net. Deep Net stores legal document s, med ic a l record s a nd academic information like research studies, among others.

These, however, are contents that Google, Bing or Safari have limited or no access to. Accessing these contents requires membership or authorization, as well as using a special search engine to

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RCEP Talks In Indonesia Focus On Concessions, Crafting Of Sensitive List

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The current value added-tax rate in the Philippines

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According to cybersecurity experts, cyberspace is composed of three dimensions, with the Dark Web,containing encrypted content.

access to the contents.

Dark Net is the site where all sorts of nefarious activities are being conducted away from the snooping eyes of the law.

Although it can be discounted that there are also illegal activities on the Clear Net, this pales in comparison to the impact of what

transpires on Dark Net. Moreover, the Dark Net can only be accessed through the use of very special tools, such as TOR (The Onion Router) Browser, which enables anonymous communication, or browsing of the Internet. A user has to tweak TOR in order to use it on Dark Net.

Seven years ago, or two years before the People’s Republic of China announced its Silk Road initiative, the world was introduced to “Silk Road,” the first modern Dark Net market. As part of the Dark Web, Silk Road was operated as a Tor-hidden service.

n japan 0.4711 n UK 73.4931 n HK 6.5849 n CHINA 8.1777 n singapore 39.3722 n australia 41.4091 n EU 64.4461 n SAUDI arabia 13.7313

Continued on A2

Source: BSP (2, February 2018 )

BMReports BusinessMirror

A2 Monday, February 5, 2018

www.businessmirror.com.ph

US-version Silk Road: Is PHL ready for Internet’s dark side?

Continued from A1

Distinctions

F5 Net works Inc. Worldw ide Security Evangelist David Holmes said in an e-mail interview with the BusinessMirror that Dark Web (sometimes called Deep Web) and Dark Net are often used interchangeably by the general public. For threat researchers, however, these are two distinct types of hidden cybercommunication channels.

Dark Web refers to normal web sites that are not readily searchable and require a specific known address and possibly credentials to access using a normal Web browser, according to Holmes.

On the other hand, Holmes said the Dark Net contains encrypted content on shadowy networks run-

VAT rate. . .

ning over the TOR system, which requires a special software to access. “Both represent places on the Internet where criminals and privacy seekers can interact away from government and police oversight,” Holmes said. “I’m going to say Dark Markets to refer to both.”

As an alternative market and gathering place for outlaw elements, Holmes considers the Dark Web as growing.

“In general, these kinds of black market electronic places have always been around,” he explained.

“But with the advent of TOR and Bitcoin, they’ve been given new tools to grow.”

Double-edged

LIKE globalization, technology has also become a double-edge sword as it always make things

Continued from A1

“That is all talk,” Recto told the BusinessMirror over the weekend, referring to reports quoting Finance Secretary Carlos G. Dominguez III as saying the DOF could consider—provided the number of VAT exemptions is also reduced—a Senate bill to cut the VAT rate to 10 percent to ease the impact of higher excise rates under the Duterte administration’s tax-reform law.

The VAT rate reduction embodied in Senate Bill (SB) 1671 was filed recently

by Sen. Riza Hontiveros.

According to Recto, “the DOF knows you cannot take away all exemptions from the VAT.” He then cited the case of export and BPO enterprises: “Both industries represent at least 40 percent of our

economy. You can’t impose a VAT on them. There is intellectual dishonesty.”

Still, Senate President Aquilino L. Pimentel III asserts the VAT rate reduction is doable “without touching the exemptions.”

“Yes, [we can] cut VAT even without touching the exemptions. That should be possible for as long as we are judicious and conscientious in spending people’s money,” Pimentel said.

Senate Majority Leader Vicente C. Sotto III indicated other senators have yet to firm up their vote on the VAT bill.

Senate Minority Leader Franklin M. Drilon, in a separate text message to BusinessMirror, however, held out hopes that certain VAT exemptions can still be lifted, as proposed by

better—for law-abiding and lawbreaking users alike. For example, the rise of government surveillance by law-enforcement officials on normal Internet channels pushes criminals to seek these darkmarket channels.

Erez Lugassi of Maroev Cyber Systems Inc. enumerates the characteristics of the Dark Web in a forum organized by the Israel Chamber of Commerce in the Philippines (ICCP). MCSI is a cybersecurity consulting firm and a member of the 1998-incorporated Fibercom Telecommunications Philippines.

In his presentation, Lugassi showed the various web sites that the Dark Net is hosting. Four are from the Philippines.

The four web sites from the Philippines sell shabu (methamphetamine) and other illicit drugs,

Hontiveros, provided President Duterte gives this a big push. “Yes, I will support [the Hontiveros bill],” Drilon said.

But the Minority Leader acknowledged that “the lobby of business groups enjoying VAT exemptions makes the removal of the exemption very difficult and almost impossible to achieve.”

Drilon anticipates lengthy deliberations over Hontiveros’s VAT reform bill, recalling that “we saw this in the VAT and TIMTA debates,” referring to the Tax Incentives Management and Transparency Act passed earlier by Congress.

He hinted that Palace persuasion may come into play to win over enough votes to pass the VAT reform bill in the Senate.

“Just like the rationalization of fiscal incentives, both reforms are possible only if President Duterte flexes his po-

according to Lugassi, MCSI security architect and associate vice president for marketing and business development. He said a web site offers illegal passports, while others deal with arms, hackers for hire, online dating and engaged in the sex trade.

AlphaBay case

LUGASSI cited the infamous AlphaBay as the superstar website of the Dark Net. By offering its socalled “unique advantages,” such as easy, nice-looking “eBay-like site,” he said clients were able to provide their comments, use escrow for payments (multisignatures before any deal was done), had referral/ affiliate program and offers exit scam prevention.

AlphaBay was locked after the Operation Bayonet police operation litical muscle and political will to make these reforms possible,” Drilon added.

VAT rate cut impact

last Friday Dominguez voiced“serious reservations” over the Hontiveros-led proposal to cut the VAT rate, urging people “to be very careful” in suggesting such owing to the huge task to finance the Duterte administration’s infrastructure program—estimated to require at least P8 trillion until 2022.

Despite his reservations, Dominguez did not rule out considering the VAT rate reduction, saying DOF officials have not calculated the impact of such VAT rate cuts. He dangled the option of eliminating the exemptions as a countermove to ease the fiscal impact of reducing the rate.

The finance chief was earlier quoted as saying, “There might be a possi-

swooped down in its base in the United States, Canada and Thailand. Alexandre Cazes, a Canadian citizen and alleged founder of AlphaBay, was found dead in his cell in Thailand several days after his arrest, according to news reports.

Citing data from the European Police and United States’s Department of Justice (DOJ), Lugassi says Cazes’s black-market web site “had as many as 40,000 vendors and 200,000 members.”

He points out that the AlphaBay “administrator” had been in the watch list of government agents, particularly from Europe and the US who were hounding him. Nevertheless, Cazes was able to elude the long arms of the law because the Dark Net’s anonymity was able to protect him.

After careful planning and

bility to reduce the rate by eliminating all exemptions, that is one possibility, but we haven’t calculated that yet.

But definitely we have to look at all the alternatives.”

The current VAT rate in the country is 12 percent, but the government only collects 4.7 percent as a percentage of GDP, Dominguez was quoted in the PNA report as pointing out. He added that improved collection—by eliminating exemptions, among others—could raise the collection level to at least 7 percent. “Of course we are open to reducing the rate of the VAT. Unfortunately in the past VAT has been used as a fiscal incentive which is really wrong,” he added.

VAT rate in the Philippines was increased to its current level from 10 percent in February 2006 under the term of President Gloria Macapagal-Arroyo.

preparation, combined American and European authorities efforts’ were able to track him in Thailand and apprehended him on July 5 last year after he inadvertently routed himself through his e-mail address. He was using his regular e-mail address when replying to AlphaBay users who had forgotten their passwords. Authorities found his e-mail address in the header of e-mails he sent out.

Based on the files seized from his laptop, authorities found out that Cazes personally estimated he had a total net worth of $23,033,975. He also allegedly owned a Lamborghini worth $1 million. Authorities later said they already asked for the forfeiture of his assets in Thailand, including bank accounts and four vehicles that included a Porsche.

To be continued

Labor groups. . .

Continued from A16

under the EO shall be through unanimous agreement in the National Tripartite Industrial Peace Council (NTIPC) in conjunction with the DOLE secretary,” TUCP President Raymond Mendoza said.

Labor Undersecretary Joel B. Maglunosd confirmed the said provision of the draft EO in an interview with the BusinessMirror.

“It has no major difference from our current policies [on contractualization]. It just defined security of tenure and added a provision that in an event some positions must be contracted out, the NTIPC will create a body to define that,” Maglunsod said.

The EO, which was supposed to have been signed by President Duterte last December, was a result of the DOLE’s consultation with employers and labor groups.

Last month the DOLE revised the draft EO upon the request of some labor groups.

President Duterte is expected to meet with labor representatives this week to discuss the EO. Days before the said meeting, labor groups expressed concern on the report quoting President Dutete that Labor Secretary Silvestre H. Bello III will soon resign from his post to focus on his plans to run for senator in 2019.

The Federation of Free Workers (FFW) urged Bello to postpone his political plans in favor of reforming government policies on contractualization. “It’s too early to talk about politics now.

What we need is concrete action to stop contractualization,” FFW Vice President Julius Cainglet said.

For its part, the Associated Labor Union-TUCP (ALU-TUCP) said they will throw their support to Bello’s senatorial bid if the EO is signed.

“If he would be able to get an EO banning contractualization before he steps down, he will be supported by all labor groups and workers organizations,” ALU-TUCP Spokesman Alan Tanjusay said.

Bello, however, immediately denied the report that he will soon be leaving his post saying the President was merely teasing him, when he publicly announced his supposed senatorial bid.

“I am already too old for that.

President Duterte was just joking when he said that,” Bello clarified in a radio interview last week.

Under Bello’s administration, the DOLE imposed additional restrictions for contractors and subcontractors and launched an ongoing campaign against illegal contractualization resulting to the regularization of thousands of contractual workers.

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Performance committee formed to audit 89 forest agreements

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By Jonathan L. Mayuga

@jonlmayuga

ecretary Roy A. Cimatu of the Department of Environment and Natural Resources (DENR) has designated Undersecretary Jonas Leones to head the sevenmember Performance Evaluation Committee (PEC) tasked to provide instructions and directions on the conduct of performance audit of all existing Integrated Forest Management Agreements (Ifmas) all over the country.

Leones, who was earlier designated by the DENR chief as his spokesman, is currently the DENR’s undersecretary for policy, planning and international affairs.

With his new assignment, Leones will lead in the planning of the assessment activities and harmonize the conduct of the assessment in the different regions to ensure that the integrity of forests in providing goods and services are maintained.

The DENR chief has earlier ordered the conduct of performance evaluation of firms with large forest-management concessions following President Duterte’s order to cancel two Ifmas in the Zamboanga Peninsula

because of the massive flashfloods and landslides that killed more than two dozen people in December last year.

Subsequently, Cimatu ordered the creation of 14 performance evaluation teams (PET), clustered in Luzon, the Visayas and Mindanao island groups. Six teams will be created in Luzon, three in Visayas and five in Mindanao.

The PEC has to “consolidate and analyze the findings and recommendations of the PETs, including the penalties and sanctions, if warranted.”

Cimatu specifically directed the PETs to scrutinize the 25-year comprehensive development and management plan (CDMP) approved

by the DENR for each of the Ifma holder.

Operating on the principle of sustainable forest management, the CDMP details every facet and stage of forest management that an Ifma holder should implement, as it establishes tree plantations while protecting and enhancing the remaining forest cover within the concession area.

The audit will cover five aspects in relation to the operations of Ifma contractors: technical, legal, environmental, economic and impact on agricultural areas.

To ensure that all the five aspects will be covered by the review, Cimatu directed DENR regional directors to ensure that each of the14 PETs will have, as members, the experts from the Environmental Management Bureau and the Mines and Geosciences Bureau.

A secretariat, consisting of experts from the Forest Management Bureau (FMB), will also be created to provide technical and administrative support to PEC and PETs, especially in the gathering of documents vital to the undertaking.

The PEC, through the secretariat, shall ensure the immediate implementation of activities and monitor day-to-day activities of the PETs and document all activities of the performance evaluation.

Based on FMB records, the country has an existing 102 Ifmas, with a combined area of 727,982 hectares.

Of these, however, only 89 Ifmas will be covered by the review of the DENR, as 13 are within the Autonomous Region of Muslim Mindanao.

THE committee will evaluate firms with large forest-management concessions. Nonie Reyes

C.A. affirms former MRTA chief’s $30-M extort case

By Joel R. San Juan @jrsanjuan1573

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HE Court of Appeals (CA) has junked the plea of former Metro Rail Transit Authority (MRTA) General Manager Al Vitangcol III to reverse its earlier decision affirming the order issued by the Office of the Ombudsman, which found him administratively liable for attempting to extort $30 million from Inekon, a Czech company engaged in the supply of light rail vehicles and for attempting to impose a partnership on the same firm.

In a three-page resolution, the CA’s Former Eight Division held that Vitangcol failed to raise new arguments to warrant the reversal of its decision issued on July 3, 2017.

“We do not find any bona fide effort on the part of Vitangcol to present additional matters or reiterate his arguments in a different light. Thus, there is no need to reconsider or revisit what was already presented before this Court when we rendered the July 3, 2017, decision,” the CA said.

The CA also said even granting Vitangcol’s request to issue a subpoena commanding National Bureau of Investigation Director Dante Gierran to produce the final report of agent

Jose Gabriel Jr. and James Calleja, which purportedly exonerated him from the extortion attempts, would not help in his case. “Here, while Vitangcol has sufficiently designated and described the document requested to be subpoenaed, he failed to show its relevance to the instant controversy,” the CA pointed out.

The CA noted that Vitangcol admitted that the final report was merely submitted to then-Director Virgilio Mendez, who in turn disregarded the conclusion and recommended that complaints be filed against him.

“On this score alone, the final report cannot be construed as ‘a solid proof’ of Vitangcol’s innocence,” the CA said.

Concurring with the ruling were Associate Justices Celia LibreaLeagogo and Amy Lazaro-Javier.

In its July 3, 2017, decision penned

by Associate Justice Pedro Corales, the appellate court denied the petitioner for review filed by Vitangcol seeking the reversal of the Ombudsman’s joint order issued on February 12, 2016 and June 14, 2016.

The assailed decision found Vitangcol guilty of two counts each of grave misconduct, serious dishonesty and unlawful solicitation and imposed upon him the penalty of dismissal from service with can-

cellation of eligibility, forfeiture of retirement, benefits and perpetual disqualification from holding public office.

The appellate court did not give credence to Vitangcol’s defense that the Ombudsman has lost disciplinary authority over him, as he was no longer a public officer at the time the complaint was filed and the case was rendered moot and academic by his resignation prior to its filing.

Vitangcol resigned from his post on May 27, 2014, while the complaint against him was filed on June 23, 2014.

The charges are in relation to the awarding of the contract for the P3.7 billion ($80.16 million) MRT 3 expansion project in 2012.

The appellate court also dismissed Vitangcol’s claim of political persecution for exposing anomalies committed by some officials of the Department of Transportation and Communications in connection with the operations of MRT 3.

It held that Vitangcol’s attempts to extort money from Inekon and compel the company to enter into a joint venture agreement were sufficiently proven by Czech Ambassador Josef Rychtar and Inekon representative Joseph Husek’s sworn statements.

Editor: Vittorio V. Vitug • Monday, February 5, 2018 A3

AFP recovers loose firearms from civilians in Sulu

By Rene Acosta

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@reneacostaBM

HE military’s twin campaigns against the Abu Sayyaf Group (ASG) and the recovery of loose firearms in the hands of civilians in Sulu are continuing to gather steam as more firearms were surrendered to troops over the weekend.

Marine Spokesman Capt. Maria Rowena Dalmacio said five residents of Barangay Kiput, Pata, Sulu, turned over firearms to members of the Philippine Marines Ready Force—Sulu under Col. Armel Totalo.

The surrender of firearms to the 31st Marine Company of Marine Battalion Landing Team 1 stationed at Barangay Saimbangon, Pata, was facilitated by Barley Sahid, barangay chairman of Kiput.

The loose firearms that were yielded included three M16 rifles with five magazines and 104 rounds of ammunition and two pieces of M1 Garand rifles with four clips and 29 rounds of ammunition.

The turnover of firearms last Saturday followed the surrender of high-powered firearms to Brig. Gen. Cirilito Sobejana by the local officials of Pata, headed by Mayor Anton Burahan, and even by other officials.

Sobejana said among those surrendered were three 81mm mortar tubes, a 90rr and a cal .50 barrel; four M16 rifles, M14 rifles, five Garand rifles; and one M-79 grenade launcher.

It also included 149 rounds of M16 ammunition, 176 rounds of cal. 30 machinegun and round for 40mm, six pieces magazine clips for M16, six magazines for M14 and 27 clips for Garand.

“The genuine gesture of Mayor Burahan

The genuine gesture of Mayor Burahan and his constituents in giving up voluntarily their war materiel can be a good example to all other government officials and the Tausogs as a whole who are bearing arms illegally.”—Sobejana

and his constituents in giving up voluntarily their war materiel can be a good example to all other government officials and the Tausogs as a whole, who are bearing arms illegally,” said Sobejana, commander of the Joint Task Force Sulu.

“The surrender is brought about by the relentless campaign of JTF Sulu against illegally possessed firearms. It is really our goal to make Sulu a gun-free province,” he added.

Last Wednesday Marine personnel also recovered several firearms and ammunition ay Barangay Pisak Pisak, also in Pata following the surrender of ASG members.

Economy

A4 Monday, February 5, 2018 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

www.businessmirror.com.ph

Solon files bill easing foreign limits in retail

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By Butch Fernandez

@butchfBM

emoving barriers to foreign investors’ entry in retail trade will boost foreign direct investments (FDI) in the country, Sen. Sherwin T. Gatchalian said over the weekend, adding the move is also expected to spur a “more progressive investment climate” in the Philippines.

In filing Senate Bill (SB) 1639, Gatchalian proposes to remove existing equity and capitalization requirements under the retail trade liberalization law, or Republic Act (RA) 7042 reducing the minimum requirements for interested foreign enterprises to engage in the local retail trade.

Gatchalian, who chairs the Senate Economic Affairs Committee, however, assures that “t hese a mend ments sha l l be aligned with the foreign-investment guidelines stipulated in the Foreign Investments Act, and will also be harmonized with similar regulations observed in

GATCHALIAN: “There is so much to learn from embracing diversity in the marketplace, which a protectionist mind-set cannot provide.”

other Asian countries.” “ These requirements, along with other barriers, have made

A woman checks the label of a popular brand of milk displayed at a grocery store in Makati. A lawmaker has filed a bill, which seeks to open up Philippine retail trade to increase foreign investments. ALYSA SALEN

us lag far behind our Asian peers when it comes to FDI. I believe it is high time we rethink the restrictive legal framwork that is deterring the inflow of potential

investments,” he added.

The senator pointed out that the Retail Trade Liberalization Act of 2000 currently requires a minimum paid-up capital of $2.5

million for a 100-percent foreign ownership of a retail business, noting that this serves as “an onerous requirement to discourage participation of investors.”

Citing data from the Department of Trade and Industry-Bureau of Investments, Gatchalian recalls that in the 18 past years following passage of the existing retail trade law, “only 22 foreign retail firms have invested in the country’s retail sector.”

He added that, unlike the Philippines, Singapore, Indonesia and Cambodia impose no minimum capital requirements or limits on foreign equity participation in the retail-trade sector.

Once SB 1639 is enacted into law, Gatchalian foresees it would “stimulate market competition and growth that could highly benefit Filipinos through greater job creation and lower prices for quality goods and services available in the market.”

T he s e n ator e x pl a i n s t he proposed law, likewise,aims to ease the process and opening the retail-trade market for competition, adding that “greater competition results into more opportunities, more choices and better goods and services offered for our people.” “ There is so much to learn f rom embrac ing d iversit y in the marketplace, which a protectionist mind-set cannot provide,” Gatchalian said.

UP-PGH report: House panel backs measure granting more teeth to Consumer Act No deaths due Once in place, Timbangan ng to Dengvaxia Bayan Centers will give Filipino

By Jovee Marie N. dela Cruz @joveemarie

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one of the deaths of the 14 children autopsied by the Public Attorney’s Office (PAO) were proven to be due to Dengvaxia.

This was the result of the study and investigation of the forensic pathologists panel from the University of the Philippines-Philippine General Hospital (UP-PGH).

Given this latest findings, Doctors for Public Welfare, which includes former Health Secretary Esperanza Cabral and vaccine expert Lulu Bravo, is now asking the Department of Justice (DOJ) to stop the PAO from conducting more autopsies because “it makes no sense for any more families to be subjected to the torture of having a loved one exhumed and cut up only to find out that no useful information was derived from the cruel act.”

The PAO, under the DOJ, led the investigation, which required performing autopsies on 14 children who allegedly died after being vaccinated with Dengvaxia.

In a joint statement, the group urged“the DOJ to order the PAO to stop performing autopsies on these children and to leave the matter of determining the cause of death to competent forensic pathologists.”

According to the Doctors for Public Welfare, it now appears that only one case might be causally associated with the vaccine, that is, the one with dengue and with antibodies to dengue.

However, it has yet to be determined if the vaccine had anything to do with the death. It further noted that two of the children autopsied showed that vaccine failure may have been the cause.

This means that no antibodies were produced, and so they could not have suffered from an antibody-enhanced reaction. This can happen when the vaccine is not stored properly, and so loses its potency. It’s although the children were never vaccinated. Hence, the two most likely died of dengue not due to the vaccine, the group explained.

These findings mean that, in diagnosing all 14 autopsied children as having dengue as a complication of Dengvaxia, Dr. Erfe of the PAO was wrong in practically all of the 14. He may, at the very best, have been correct in only one of 14, of the cases, or 7 percent; and wrong in 13 of 14 or 93 percent. In actuality, he is probably wrong in all given that any actual causative relationship between the death of the one child to the vaccine is yet to be determined, the group pointed out.

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he House Committee on Appropriations endorsed last week the plenary approval of an unnumbered substitute measure, which seeks to strengthen Republic Act (RA) 7394, or the Consumer Act of the Philippines.

The unnumbered substitute measure is entitled, “An Act for the establishment of a Timbangan ng Bayan Center in all markets nationwide, amending for the purpose, Chapter II of RA 7394, otherwise known as the Consumer Act of the Philippines.”

The bill, which was principally authored by Rep. Gloria MacapagalArroyo of the Second District of Pampanga, seeks to promote honesty in the marketplace, particularly in using a timbangan, or weighing devices.

Under the bill, individuals who fraudulently alter any scale, balance, weight or measure after it was officially sealed will be slapped with a fine between P50,000 and

homemakers and other individuals the assurance that they will not be duped by shrewd vendors with their undercalibrated weighing scales. It’s also a good way to pinpoint who the cheaters are in the marketplace.”—Nograles

P1 million, and/or imprisonment between one and five years.

The Consumer Act of the Philippines currently prescribes a fine of just P300 and a one-year jail term for such offenses. It was signed into law on April 13, 1992.

In her explanatory note, Macapagal-Arroyo said the violability of the Philippine economy due to numerous uncontrollable factors, one of which is the global economic slowdown, has caused prices of prime commodities

to “scale to prohibitive heights,” making it more power difficult for the average Filipino household to put a decent meal on their table.

“The establishment of a Timbangan ng Bayan Center in all public markets nationwide will provide the buying public an effective means of checking the accuracy of the weight and quantity of the goods they are buying while, at the same time, discouraging dishonest vendors to commit any irregularity

China shows the way in smart cities

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hat is a smart city?

A smart person is one who has or shows a quickwitted intelligence, aside from being clean, tidy and well dressed. But a smart city?

It should be more than fashionable and upmarket; it is an urban center that is extensively using computers, gadgets and things capable of some independent action, guided of course by big data or artificial intelligence (AI). Simply put, it is a high-tech city, the urban center of the future.

But, in China, the future of smart cities is already here. At least, this was the report at the recent World Economic Forum in Davos.

It is widely known by now that Chinese consumers seldom use cash for everyday transactions, especially in first- and second-tier cities. They use their cell phones to scan the QR codes of merchandise or services, such as shared bicycles, with the payment app connected through Wechat.

It was reported in Davos that a city in China—Hangzhou—has taken the use of big data, AI and new, innovative technologies of the computer age to a whole new level.

Yang Chengxi of CGTN reported that Hangzhou, is home to China’s

largest technology companies, led of course by the Alibaba Group of Jack Ma. An industry white paper last year dubbed Hangzhou as the smartest city in China, he said. It is in Hangzhou, where many tech firms are working closely with the local government to improve public services, such as traffic, education, disaster preparedness and hospital operations.

Here, many citizens are feeling the transformational impact of technology on many aspects of life.

Tech giant Alibaba is working with traffic police in a trial program involving 128 traffic signal lampposts that are connected to Alibaba Cloud’s computer system called “city brain.”

Min Wanli, Alibaba Cloud’s chief scientist, said the system can collect a wide range of real-time data from video-surveillance cameras, microwave detectors and mobileapp devices.

This wealth of information then undergoes data digestion, or “connecting the dots together,” and combining different features of the system, seeking patterns and identifying any deviation from the usual.

“The system uses algorithms

to detect possible car crashes and automatically alter traffic lights so that ambulances can pass through,” said Sun Shixiang, vice deputy of the Xiaoshang district traffic police in Hangzhou.

This results in quick reaction time for the traffic police, unlike before when they do the monitoring manually.

Sun said the trial region now has a 15-percent shorter pass-through time, and the “city brain” flags about 500 incidents per day with 92 percent accuracy.

Developers of these new technologies in Hangzhou said they were inspired by President Xi Jinping’s speech during the 19th Congress of the Communist Party of China last year.

President Xi said, “We should aim for the frontiers of science and technology, strengthen basic research and make major breakthroughs in pioneering basic research and groundbreaking and original innovations.

“These efforts will provide powerful support for building China’s strength in science and technology, product quality, aerospace, cyberspace and transportation; and for building a digital China and a smart society.”

because of the imminence of getting caught in flagrante delicto,” Arroyo said.

For his part, House Committee on Appropriations Chairman Karlo Alexi B. Nograles of Davao said the measure seeks to further improve the protection of consumers by the state.

“The Consumer Act has been in effect for almost 26 years now, so some of its provisions need to be attuned to the times,” Nograles said.

“Vendors will definitely think twice about committing them once the law gets more teeth,” he added.

During a deliberation on its resulting substitute bill on January 17, the appropriations panel recommended that the measure’s appropriations provision (Section 6) indicate that “the amount necessary to carry out the provisions of Section 1...shall be charged against the internal revenue allotment (IR A) and other funds of the local government unit (LGU) concerned.”

Section 1 of the measure effectively inserts a new provision under Article 62 of Chapter II of RA 7394.

The provision calls for the establishment of Timbangan ng Bayan Centers in all markets in the country “where instruments for determining weights and measures shall be open for and accessible to anyone who wants to verify the accuracy of the quantity and measurement of the products they purchased.”

“Once in place, Timbangan ng Bayan Centers will give Filipino homemakers and other individuals the assurance that they will not be duped by shrewd vendors with their under-calibrated weighing scales. It’s also a good way to pinpoint who the cheaters are in the marketplace,” Nograles said.

“We’re putting provincial, city and municipal governments in charge of this undertaking through their internal revenue allotment,” he said.

The IRA is the share that LGUs receive from taxes collected by the national government.

French firm Sanofi urged to put up indemnity fund for vaccinated kids

T

he chairman of the House Committee on Good Government and Public Accountability last Sunday asked French multinational pharmaceutical company Sanofi SA to put up an indemnity fund to “secure Filipino families against any loss or financial burden suffered due to its faulty anti-dengue vaccine.”

Rep. Johnny T. Pimentel of the Second District of Surigao del Sur, the panel chairman, made a statement after his committee reopens its probe on Dengvaxia issue on Monday.

The committee will reopen its inquiry into the previous administration’s 2015 purchase of some P3.5 billion worth of Dengvaxia vaccines.

According to Pimentel, there were reported mounting cases of Dengvaxia-related hospitalization and in extreme instances, deaths among Filipino children.

“It is high time for Sanofi to comply with Health Secretary Francisco T. Duque III’s request for an indemnity fund to pay for the treatment of Filipino school children rendered sick after receiving Dengvaxia shots,” Pimentel said.

“This will be our first hearing since Sanofi released the negative findings

of its long-term follow-up study, which showed that children who never had dengue but who were given the shots had an increased risk of a severe case and hospitalization from the third year after immunization,” he added.

Graft

Pimentel said officials found liable for the botched purchase of Dengvaxia shots are bound to face graft charges for a transaction “that may be deemed manifestly and grossly disadvantageous to the government.”

The lawmaker added graft charges may be warranted against the officials involved even if they did not make any money for themselves from the transaction.

“Under the law, officials may be held accountable for corrupt and unlawful acts, such as entering into highly injurious purchase contracts, without any need to establish that they profited from the transaction,” he said.

Under the administration of former President Benigno S. Aquino III and Health Secretary Janet Garin, the Philippines became the first country in the world to launch in April 2016 a public inoculation plan against dengue using Dengvaxia. Jovee Marie N. dela Cruz

Agriculture/Commodities BusinessMirror

www.businessmirror.com.ph

Editor: Jennifer A. Ng • Monday, February 5, 2018

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PHL to regain bird flu-free status by March

By Jasper Emmanuel Y. Arcalas

T

@jearcalas

he Philippines could finally become bird flu-free before the end of the first quarter after the government has successfully completed the cleaning and disinfection process in the last affected farm in Nueva Ecija.

Bureau of Animal Industr y (BAI) Animal Health and Welfare Division Chief Aryln Vytiaco told the BusinessMirror that the agency has started to load 650 heads of day-old cockerels as sentinel birds in the bird flu-affected layer farm in Cabiao, Nueva Ecija, on February 1.

T his would mean that the 90-day countdown toward regaining the country’s bird flu-free sta-

tus has already started.

Vytiaco disclosed that the 90th day following the cleaning and disinfection of the bird flu-affected poultry farm in Cabiao, Nueva Ecija, falls on March 23.

T his would mean that the f i n a l s a n it at ion pro ce du re s in the bird f lu-affected layer farm were completed just before Christmas, or around December 22, based on the computation

File photo

of the BusinessMirror.

Under the Terrestrial Animal Health Code of the World Organisation for Animal Health (OIE), a country will only be declared free from avian influenza (AI) if

it would not report any outbreak within 90 days after the final disinfection of the affected areas.

In its official report to the OIE, the BAI said 42,000 birds were affected by the bird flu that struck

Sugar production seen declining by 8% T

he countr y’s raw-sugar output in crop year (CY) 2017-2018 could reach 2.3 million metric tons (MMT), 8 percent lower than the 2.5 MMT recorded in the previous CY, according to the Philippine Sugar Millers Association (PSMA).

P SM A E x e c ut i ve D i re c tor Fra nc isco D. Va r u a told t he BusinessMir ror t h at u n favorable weather conditions affected sugarcane plantations in some provinces, resulting in lower sugar content and milling recovery.

“First, [the projected decline in output] is because of the weather.

Rainfall affected plantations in the early parts of the cropping season. Also, some farmers reduced inputs as a result of lower sugar prices,” Varua said in a recent interview.

PSM A’s output estimate is 130,000 MT higher than the 2.27 MMT projected by the Sugar Regulatory Administration (SRA) for the current CY, which will end on August 31.

Data from the SRA showed that as of January 21, the country’s sugar production has reached 800,191 MT, 2.64-percent lower than the 821,854 MT recorded in

the same period last year.

Due to the expected decline in total sugar output in the current (CY), the SRA has reduced the allocation of sugar for the United States market (“A”) to 6 percent, from 10 percent.

The allocation of world market sugar (“D”), or those for export to other countries, was also cut to 6 percent, from the previous 10 percent.

The SR A also increased the sugar allocation for the domestic market to 93 percent, from 80 percent. The SRA pegged the domestic demand for sugar at 2.17 MMT. “The domestic market remains as the priority market for locally produced sugar, and it is of national interest that a comfortable buffer, or carry-over volume, of ‘B’ sugar during the end of season and for the start of the next crop year for stable supply and prices,” Sugar Order (SO) 1-A read.

“This sugar order shall take ef fec t i m med i ate ly cover i ng sugar production of week ending January 28 and subsequent week endings of CY 2017-2018,” it added.

Varua also said he doesn’t see Manila receiving an additional

Rainfall affected plantations in the early parts of the cropping season. Also, some farmers reduced inputs as a result of lower sugar prices.”–Varua sugar import quota from Washington in the current fiscal yea, as Mexico is expected to fill up the expected sugar shortage of the United States.

“We do not expect additional quota from the US, that is why we reduced the ‘A’ allocation from 10 percent to 6 percent,” he said.

“Mexico has been able to reengineer their situation to allow them to ship raw sugar of acceptable quality to US refineries and the same time allow them to ship in bulk,” Varua added.

T he Ph i l ip pi ne s w a s g i v en a sugar impor ts quota of 142,160 metric tons raw value under Washington’s tariff-rate quota (TRQ ) allocation in fiscal year 2018, which ends on September 30.

Countries authorized by the United States to export sugar un-

der the TRQ scheme may do so at lower duties.

T he T RQ is t he m inimum amount to which the US is committed under the World Trade Organization agreement.

The SRA, through SO 1-A, recently slashed its output forecast in the current crop year due to “unfavorable weather conditions.”

T he attached gover nmentowned and -controlled corporation of the Department of Agriculture earlier projected that the country’s raw-sugar output to reach 2.38 MMT as indicated in SO 1.

The SRA also projected that total sugarcanes milled in the current crop year would reach 25.471 MMT, 9.19 percent lower than the 28.051 MMT recorded volume in CY 2016-2017. Jasper

Emmanuel Y. Arcalas

Cabiao, Nueva Ecija. Of the total population, 27,675 instantly died from the virus, while the remaining 14,325 were killed and disposed of.

The discovery of AI in a layer

farm in Cabiao last November reset the country’s countdown to bird flu-free status. The government has earlier targeted to notify the OIE last December 20, after the cleaning and disinfection of AIaffected farms in San Isidro and Jaen, Nueva Ecija.

Under the Avian Influenza Protection Program: Manual of Procedures 2016, the BAI would now monitor the sentinel birds for the next 35 days. The BAI will collect oropharyngeal, or tracheal, swab samples from the sentinel birds five times during the 35-day period. The samples would then be subjected to laboratory tests to determine whether the AI virus is still present in the area.

The recognition of the Philippines as a bird flu-free nation would reopen foreign markets for local poultry. The country’s poultry exports are still banned in a number of countries, including South Korea, Japan, Singapore, after the government announced the discovery of bird flu in Central Luzon last August.

Banana output up nearly 3% in 2017–PSA

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he country’s banana production in 2017 expanded by almost 3 percent to 9.166 million metric tons, from the 2016 record of 8.903 MMT, according to the Philippine Statistics Authority (PSA).

Banana output in the fourth quarter of 2017 alone, according to the PSA, grew by 3.15 percent to 2.409 MMT, from the 2.335 MMT registered in the same period in 2016.

“Banana production was 3.15 percent more this year because of increases in area and number of bearing hills harvested from the plantation farms in Northern Mindanao in response to higher demand for the product,” the PSA said.

“A dd it ion a l e x pa nsion a r eas from cor porate far ms in Soccsksargen were likewise noted,” it added.

T he PSA noted there were also bigger bunches developed in Cagayan Valley and the Autonomous Region in Muslim Mindanao as a result of good weather conditions.

Pineapple farmers, according to the PSA, produced 2.671 MMT

in 2017, 2.27 percent higher than the previous year’s 2.612 MMT. During the October-to-December period, pineapple production reached 699,220 MT, 2.95 percent higher than the 679,170 MT recorded in the same period in 2016.

“In the case of pineapple, additional areas harvested from corporate farms in Northern Mindanao and Soccsksargen led to the 2.95-percent increase in production,” the PSA said.

However, the country’s total mango production last year declined by almost 10 percent to 737,030 MT, from the 2016 record of 817,050 MT. The mango subsector also recorded a 10.10-percent year-onyear contraction in terms of production in the fourth quarter of 2017. Mango output during the October-to-December period of 2017 reached 27,490 MT. “Farmers in Zamboanga Peninsula and Northern Mindanao were discouraged to conduct flower, induction activities because of intermittent rains during the crop’s flowering stage,” the PSA said. Jasper Emmanuel Y. Arcalas

Southern California’s brief escape from drought ends P

HILLIPS STATION, California—California’s brief escape from severe drought ended on February 2 after scientists declared more than 40 percent of the state in moderate drought and water officials confirmed lowerthan-normal snowpack in the Sierra Nevada.

Los Angeles, Ventura and Santa Barbara counties, which hold nearly a quarter of the state’s population, were rated in severe drought.

During a week of rainless skies and some record-high temperatures in Southern California, water officials also trekked into the Sierra Nevada last Thursday and manually measured the vital snowpack, which stood at less than a third of normal for the date.

“It’s not nearly where we’d like to be,” Frank Gehrke, a state official, said of the snow, which supplies water to millions of Californians in a good, wet year.

Los Angeles and some surrounding areas have received only one

significant rainstorm in nearly a year.

In Ventura and Santa Barbara counties, which are about 100 miles (160 kilometers) north of Los Angeles, the lack of rain and dry vegetation fueled a December wildfire that grew to be the largest recorded in state history. When it finally rained, the storm triggered mudslides that killed at least 21.

For people who survived the mudslides, looking out at clear and sunny skies again last Thursday was a relief despite the deepening drought.

“I know we need rain, but another mudslide would be awful,” said Santa Barbara restaurant hostess Cayla Stretz.

Survivors in her area are still digging out homes, many beaches and roads are closed by mud, and business is down in the beach town, Stretz said.

It took a near-record rainy winter in Northern California last year to snap the near-record five-year dry spell.

Last year’s rain has most of the state’s reservoirs higher than usual, a bright spot, said Doug Carlson, a state Department of Water Resources spokesman. Two months remain in the state’s peak rain and snow season, leaving room for hope, Carlson said.

Gov. Jerry Brown lifted California’s drought state of emergency in April, but it took until September for the last bit of the state to emerge from the severe category of that drought—until now.

Only 13 percent of the state was considered in drought last week, according to the US Drought Monitor, which is a project of several government agencies and their partners.

During the peak of the state’s dry spell, 99.9 percent of California was in some stage of drought, and nearly half fell into the very highest category.

Cutbacks at the peak of the five-year state drought mandated 25-percent conservation by cities and towns.

In this January 3 file photo, Grant Davis (center), director of the Department of Water Resources, discusses the results of the first snow survey of the season at the nearly snow barren Phillips Station snow course, near Echo Summit, California. California’s water managers are carrying out their midwinter snowpack survey on February 1, as the winter’s dry spell persists. AP Photo/Rich Pedroncelli, File

State water officials announced no new water-cutting measures Thursday, saying only that conservation had to be a way of life in arid California.

The years of disappointing w inters and competition for

remaining water supplies devastated native species, ranging from Chinook salmon to pine forests, dried many household wells in the state’s middle and compelled farmers to plunge other wells deep into the earth in search of irrigation water.

In California’s Central Valley, the nation’s richest agricultural producer, government officials had to install water systems during and after the five-year drought for small towns, such as East Porterville, after household wells dried. AP

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AseanMonday BusinessMirror

Monday, February 5, 2018 • Editor: Max V. de Leon

Judge halts deportation of Indonesian Christians

Seth Kaper-Dale (left), a pastor, talks to Arthur Jemmy, an Indonesian man who is taking sanctuary in Kaper-Dale’s church to avoid deportation in Highland Park, New Jersey. AP/Julio Cortez

H

IGHLAND PARK, New Jersey —A federal judge has temporarily halted deportation proceedings against Indonesian Christians who are in the United States illegally but are seeking to gain legal status, including a man honored for his work helping to rebuild more than 200 homes after Superstorm Sandy.

The order last Friday was issued

by US District Judge Esther Salas in Newark in response to a lawsuit filed by the American Civil Liberties Union (Aclu) and applies to Indonesians who have orders of removal dating to before 2009.

The order affects roughly 50 people in New Jersey who had identified themselves to Immigration and Customs Enforcement (ICE) in

2009 as part of a program to obtain work authorization and stays of deportation, according to the Aclu and Seth Kaper-Dale, copastor of a church where some of the immigrants sought sanctuary.

The lawsuit came after several enforcement actions by immigration authorities in New Jersey that targeted Indonesian Christians and rekindled fears in a community

that includes people who left Indonesia years ago to escape religious persecution.

Two men were arrested last month after they dropped their children off at school.

Harry Pangemanan, who has been in the country since 1993 and lives with his wife and two daughters in central New Jersey, sought sanctuary at the Reformed Church of Highland Park, where he is an elder and where he spent nine months in 2012 under similar circumstances.

Two other men, Arthur Jemmy and Yohanes Tasik, already were living there to avoid detention.

Salas ordered both sides to file briefs over the next month.

A spokesman for ICE’s Newark office didn’t immediately return a message seeking comment.

Pangemanan has been staying in a room that doubles as a children’s library at the church and had to move his belongings when the library is in use.

His family joined him recently

after their home was broken into and vandalized after his name was included in news reports.

“We are trying to stay strong as a family, take one day at a time,” he said in an interview with The Associated Press last week. “You do your best today, do something useful, and tomorrow is in god’s hands.”

Pangemanan came to the country in 1993 on a tourist visa that was to lapse in five years, he said.

His wife came in 1998 during a period of turmoil in Indonesia when Christians were being targeted. They cite that as one reason for not going back.

“A thousand churches were burned to the ground between 1996 and 2003,” said Kaper-Dale, of the Highland Park church. “Some islands are safer than others, but it’s too simple to say it’s safe now.”

Pangemanan concedes he didn’t know enough about immigration law when he first arrived, and wasn’t aware he had one year to apply for asylum. At the time, it didn’t seem to matter.

“Nobody asked you, as long as you are a good man, you work hard and help your company, and you pay your taxes,” he said. “You’re working like everybody else, you don’t bother anybody. Then everything changed after September 11 [2001].”

Working through the church after Sandy devastated the New Jersey coast in 2012, Pangemanan organized more than 2,000 volunteers, matching their skills with the needs of homeowners whose homes had been destroyed.

He said he traveled to other areas of the country to perform similar work, including the Carolinas, West Virginia and Texas.

A system put in place after September 11 required noncitizen men and boys from predominantly Arab or Muslim-majority countries to register and be photographed and fingerprinted.

Pangemanan and Jemmy said they complied, and have repeatedly tried to gain legal status since then, without success. AP

www.businessmirror.com.ph

Cambodia endorses amendment making insulting the king a crime

Cambodia’s King Norodom Sihamoni greets government officers as he watches the boat races during a water festival in Phnom Penh, Cambodia, on November 2, 2017. AP/Heng Sinith

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HNOM PENH, Cambodia— Cambodia’s Cabinet last Friday endorsed an amendment to the criminal code making insulting the king a criminal offense punishable by a fine and up to five years in prison.

After the endorsement, the change must go to both houses of Parliament for approval.

The government said the amendment is needed to protect the honor and reputation of the monarch.

King Norodom Sihamoni, 64, is a constitutional monarch who maintains a low profile and plays a minimal role in public affairs, while Prime Minister Hun Sen exercises almost absolute control over politics.

Neighboring Thailand has the world’s strictest lèse-majesté law, carrying up to 15 years in prison per offense.

Critics say the law is often wielded for political reasons, and there is concern Cambodia’s version might be used the same way.

Cambodia’s Constitution declares that the king is inviolable but contains no statute criminalizing criticism.

The rights group International Commission of Jurists condemned

the Cabinet’s approval of ‘lèse majesté’ legislation, saying in a statement that it “appears to be a further attempt by the government to weaponize the country’s legislation against its perceived opponents.”

“The right to freedom of expression is protected under international law and should never be subject to criminal penalties, let alone imprisonment, which is a manifestly disproportionate penalty for the exercise of the fundamental right to free expression,” it said.

Hun Sen has had a complicated relationship with the monarchy. Sihamoni’s late father, King Norodom Sihanouk, was the dominant figure in Cambodian politics for several decades, and he and Hun Sen were rivals for power after the genocidal rule of the communist Khmer Rouge in the 1970s.

Sihamoni, who took the throne after Sihanouk died in 2012, does not share his father’s interest in politics, and has posed no challenge to Hun Sen’s authoritarian rule.

His passive attitude toward politics has given rise to some criticism in recent years as Hun Sen—who technically needs Sihamoni to approve new laws—has launched harsh crackdowns on his opponents. AP

Lion dance in Singapore Trump nominee for envoy to Singapore withdraws ahead of Lunar New Year W ASHINGTON—President Donald J. Trump said last Friday that K.T. McFarland has withdrawn from consideration to be ambassador to Singapore.

Trump expressed his “disappointment” and said McFarland served the administration “with distinction.”

He said Democrats “chose to play politics rather than move forward with a qualified nominee for a critically important post.”

McFarland is a former deputy national security adviser in the Trump administration and former Fox News analyst. She was first nominated last May, but her nomination was in doubt, amid questions about her communications with ex-national security adviser Michael Flynn.

Flynn was fired by Trump last February for misleading senior administration officials about his contacts with Russia’s ambassador to the

United States. He pleaded guilty to one count of making false statements to FBI agents and is now cooperating with Mueller’s investigation.

McFarland’s nomination was not taken up by the Republican-led Senate by the end of last year, leading to a renomination in January.

According to two former transition officials, McFarland was referenced in court papers as an unnamed Trump transition team member who

spoke with Flynn in 2016 about what, if anything, to say about sanctions that had just been imposed on Russia by the Obama administration in response to election meddling.

The officials spoke on condition of anonymity because they weren’t authorized to publicly discuss the matter.

McFarland did not immediately respond to an e-mail seeking comment. AP

Myanmar denies AP report of Rohingya mass graves

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Spectators watch as members of a lion dance troupe from Indonesia compete in the 11th International Lion Dance Competition in Singapore on February 2. The lion-dance competition is usually held in a lead up to the Chinese Lunar New Year celebrated in Singapore. AP/Wong Maye-E

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INGAPORE—Performers from Southeast Asia took part in an international lion-dance competition in Singapore ahead of the Lunar New Year, the most important holiday in the Chinese calendar.

The traditional dance includes performers dressed in a lion’s costume and mimicking the animal’s movements. It is believed to bring good fortune.

The participants at the 11th International Lion Dance Competition came from Vietnam, Singapore, Myanmar, Indonesia, Hong Kong,

Taiwan and Malaysia. They were judged according to their skills, grace and music.

This year’s winner was a team from Vietnam.

“Lion dancing is a fading tradition as we are seeing less interest among the younger generation, which is more interested in spending time on their electronic devices indoors,” said Joseph Low, the head judge and member of the Singapore Wushu Dragon and Lion Dance Federation.

The Lunar New Year—the Year of the Dog—begins February 16. AP

ANGON, Myanmar—Myanmar’s government has denied a report by The Associated Press documenting at least five mass graves containing Rohingya Muslim civilians killed by the military with help from Buddhist neighbors, saying that only “terrorists” were killed and they were “carefully buried.”

The AP reported last Thursday that the mass graves in the village of Gu Dar Pyin were confirmed through multiple interviews with more than two dozen survivors who had fled to refugee camps in neighboring Bangladesh, and through time-stamped cell-phone videos. Satellite images and video of destroyed homes also showed that the village had been wiped out.

The Myanmar government’s information committee said in a statement last Friday that 17 government officials, including Border Guard Police, went to Gu Dar Pyin to

investigate the AP report and were told by villagers and community leaders that “no such things happened.”

According to the government statement, a group of Rohingya “terrorists” skirmished with security forces in the village during “clearance operations” by the military. It said about 500 villagers attacked the security forces with weapons, such as knives, sticks and wooden spears, and the security forces were forced to shoot in self-defense.

It said 19 “terrorists” died and their bodies were “carefully buried” by the security forces.

“The Myanmar government will not deny any human-rights violations and will investigate if there is strong evidence. And if there are human-rights violations after an investigation, prosecutors will take actions according to the law,” the government statement said.

In regard to Gu Dar Pyin village,

“the preliminary result of the examination has proven that AP’s report is wrong,” it said.

“The AP stands by our reporting,” Spokesman Lauren Easton said.

More than 680,000 Rohingya have fled Myanmar’s northwestern Rakhine state to Bangladesh to escape a crackdown by Myanmar’s military that began following attacks by a Rohingya militant group last August 25. The United Nations and the United States have described the crackdown as “ethnic cleansing.”

The UN human rights chief has also suggested that it may be genocide.

Many Rohingya refugees have accused Myanmar troops of a rampage of murder, rape and arson to drive them out of their homes and the country. The government has blocked international media from traveling to Rahkine state to investigate reports, and has not heeded

calls by the UN, US and others for an independent investigation.

Gu Dar Pyin was one of at least four large massacres that are known of in Myanmar since August, and many smaller-scale killings have been reported.

Survivors told the AP that hundreds of soldiers swept into the village last August 27 firing weapons, including hand grenades and rocket launchers, and burning down houses.

They said Buddhists from neighboring villages joined the soldiers, cutting the throats of the injured and helping to throw small children and the elderly into the fires.

Community leaders from Gu Dar Pyin in the refugee camps in Bangladesh have compiled a list of 75 dead so far, and villagers estimate the toll could be as high as 400, based on testimony from relatives and the bodies they’ve seen in the graves dug by the soldiers and strewn about the area. AP

The World BusinessMirror

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North Korea makes $200M by dodging UN sanctions

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orth Korea received almost $200 million between January and September 2017 from exports of coal, iron, steel and other commodities banned under United Nation Security Council resolutions meant to crack down on Pyongyang’s nuclear ambitions, according to a confidential report.

Coal shipments were delivered to China, Malaysia, South Korea, Russia and Vietnam by ships using combination of “deceptive navigation patterns, signals manipulation, transshipment,” independent UNs monitors said in the report, which was seen by Bloomberg News.

The report noted that increased sanctions have created lucrative markets for North Korean traders to procure petroleum products and export natural resources, and that more action is needed by countries to stop such oil and coal transfers.

The panel of experts’ report also warned of continuing cooperation on ballistic missile development between North Korea and Myanmar and Syria, which have been providing logistical support, military technicians and intelligence operations and using front companies.

The UN Security Council on December 23, 2017, approved new steps tightening the screws on North Korea’s economy following the launch of an intercontinental ballistic missile last November, which North Korean leader Kim Jong Un’s regime said shows it can now target the entire continental United States. The latest restrictions were meant to slash imports of refined petroleum products, restrict shipping and impose a deadline for expatriate North Korean workers to be sent home.

In January the Trump administration announced a new round of sanctions targeting North Korea’s oil industry and shipping companies, as well as individuals or entities in China and Russia, two countries the US says needs to do more to rein in Kim’s nuclear-weapons program.

Bloomberg News

Editor: Lyn Resurreccion • Monday, February 5, 2018 A7

How worried should you be?

US traders confront inflation’s reality

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or almost a decade, investors have waited patiently for any hint of inflation in the United States economy, a sign the recovery can sustain itself without emergency stimulus from the Federal Reserve (the Fed). Now they’re getting it, and many are shocked at the reaction.

It landed last week with the worst stock-market plunge since January 2016. A stronger-than-expected employment report with signs of strengthening wage growth sent the Dow Jones Industrial Average down 666 points last Friday, bringing its five-day loss to almost 1,100 points.

Share volatility surged.

Accounts of how concerned investors should be ran the gamut, from confidence traders will rush in and buy the dip, to warnings this time is different—that sell-offs that begin in the bond market have a habit of snowballing.

“It is now signaling, potentially, the end of this eight-year bull rally,” said Rich Weiss, chief investment officer and senior portfolio manager of multiasset strategies at American Century Investments. The firm manages $179 billion. “The Fed is going to have to move the interest rates, the bond market is recognizing that this incremental economic growth will spur on inflation from various sources.”

Little escaped the sell-off. All 11 industries in the S&P 500 tumbled, a coordinated plunge that hadn’t happened since the run-up to Donald J. Trump’s election. Yields on 10-year Treasuries surged as much as 6 basis points last Friday to 2.85 percent, the highest in four years. Oil dropped and the Bloomberg Commodity Index capped its biggest weekly slide in two months.

Of all the threats, surging Treasury rates and their implications for inflation are vexing investors the most, with this year’s half-

Higher rates confirm a stronger economy, and the market was very afraid of that all week long. And that’s been a big reason for selling.”

—Kinahan percentage-point climb calling into question a valuation case on equities tied to how much more you get from corporate earnings than in bond interest.

For last week, anyway, nobody seemed to care about the ostensibly positive signals coming from the bond market, the idea that higher yields bespeak rising demand for money among borrowers.

“It’s kind of a strange time and we seem to be driven by a fear of what everyone wants, and that’s higher rates,” said Joe “JJ” Kinahan, the chief market strategist at TD Ameritrade. “Higher rates confirm a stronger economy, and the market was very afraid of that all week long. And that’s been a big reason for selling.”

Strategies that worked for years buckled in the rout. So-called short volatility, in which traders bet

Trading on the floor of the New York Stock Exchange Bloomberg

that share turbulence will remain restrained, reversed, as last Friday’s 29-percent spike in the Cboe Volatility Index triggered a 13-percent plunge in the ProShares Short VIX Short-Term Futures exchange-traded fund. About 27-million shares changed hands, the most since the Brexit vote.

An irony for bulls is that the selloff arrived amid one of the best rounds of corporate earnings upgrades ever seen in the S&P 500. Combined estimates for 2018 profits among companies in the index have gone from $145.90 a share on December 15, 2017, to $156.20 last Friday, a rate of increase that is four times faster than any stretch since at least 2012, data compiled by Bloomberg show.

In theory, the increase should help assuage fear bred by charts of the United States stock market’s priceearnings ratio. Using profits from the last 12 months, companies in the S&P 500 are trading for 22.5 times income, a level that since the dot-com bubble burst is matched only during the aftermath of the financial crisis, when earnings were close to nothing.

Using 2018 estimates, on the other hand, stocks fetch a slightly sturdier multiple of 17.7, while going out to the 2019 forecast of $172.30 takes the price-earning ratio down to 16.

“During the core of earnings season, stocks almost always react to whatever their earnings announcements are, and broadly, earnings were positive,” Kate Warne, investment strategist at Edward Jones, said in an interview at Bloomberg’s New York headquarters. “But as investors worry about whether this is enough and whether it can continue, we’re likely to keep seeing stocks become more volatile.”

Central to the current anxiety is how far stocks have come in so short a time. Last month’s 5.6-percent gain in the S&P 500 was the biggest for any January since 1997, and using the index’s total return it has now risen for 15 straight months.

Friday’s sell-off finally ended a streak of 404 days in which the S&P 500 sailed along without a 3percent decline from any previous point, a record in data going all the

Trump wants to aid only ‘America’s friends’; but it may not be that easy

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RUSSELS—Distinguishing friends from enemies can be difficult. Sometimes friends disagree, and even enemies will occasionally do things for you that friends will not.

So President Donald J. Trump’s insistence in his State of the Union address this past week that Congress pass laws to ensure that “American foreign-assistance dollars always serve American interests, and only go to America’s friends” may not be as easy as it seems.

Threats to cut United States foreign aid have long been a talking point, particularly among Republicans trying to stir their base by tapping a popular, if inaccurate, perception that the money sent abroad is vast.

Previous presidents have threatened to cut foreign aid, too, often to punish countries for violating human rights. Trump appears more motivated by the notion that the US gets little in return.

That view, several experts noted, overlooks the fact that the United States has always given aid to promote US interests, even if Trump’s conception of the national interest is narrower than that of many of his predecessors.

Whether or not Congress actually follows through, the president’s warning left the impression of a superpower threatening to pick up its marbles and go home, they said. And they said it might only succeed in stoking resentment abroad and diminishing US influence in the world.

Carl Bildt, the former Swedish prime minister and foreign minister, said damage has already been done.

“Everyone knows the money serves US interests, which is also true of European money,” he said. “But this feels ugly. And this is in the State of the Union, so it has gone through a policy process, so it matters more. There’s a difference between the Twitter and the Teleprompter version of Trump policy.”

In any case, only about 1 percent of the US federal budget goes to foreign aid—and about 40 percent of that is considered security assistance, rather than economic or humanitarian aid.

Americans nonetheless remain convinced that the country spends far more. In a 2015 study by the Kaiser Family Foundation, the average respondent thought that 26 percent of the federal budget went to foreign aid. More than half the respondents thought the US was spending too much on foreign aid.

Even if the amounts of US aid are relatively small, the payoff can be substantial in leverage for the United States, in enhancing its image and promoting its values, others noted.

That is changing.

Trump, in his speech, referred to the many countries that voted disapproval of his decision to eventually move the US Embassy in Israel to disputed Jerusalem.

Last Thursday, his ambassador to the UN, Nikki Haley, told Republican legislators that she was “taking names’’ at the body, adding: “I can’t

tell you how helpful it is to have a Congress that backs us up. When y’all play the heavy, it makes it so much easier for me to play the bad cop with a smile.”

Beyond retribution, however, Trump has also made a theme of “America First,” proclaiming his dislike of programs like democracy promotion and generic humanitarian aid. “I’m sure Trump thinks it’s different, but in practical terms the US has always been giving aid based on United States interests and needs,” said Xenia Wickett, a former US official who runs the Americas program at Chatham House, the foreign affairs research institution.

“What’s changing is the view of American soft power,” she added.

“With Jerusalem and the State of the Union, there is a view that America is no longer doing the right thing and no longer for the right reasons. Its self-interest is explicit, as if it doesn’t care, so those who gave Americans the benefit of the doubt no longer do so, and it does damage.”

Marc Otte, the former European Union special representative for the Middle East peace process and a senior fellow at the Egmont Institute, Belgium’s Royal Institute for International Relations, said cutting US aid reduces, not enhances, US influence.

But the “broader question is whether America is reliable,” Otte said. “These are long-term commitments, and what does this mean for the UN system, for refugees, for Syria and Yemen if UN agencies are constrained.”

It creates resentment among other donor countries, too, he said.

As a government, the US gives less as a percentage of its gross national income than other countries—only 0.17 percent, well below the 0.3-percent average for developed countries.

But because the economy is so large, Americans still provide more foreign aid in total than any other country, and aid cuts do cause disruptions.

Even before the UN vote last December against the US decision on Jerusalem, Trump said he wanted to cut the Obama administration’s spending on foreign aid, about $42.4 billion, to $27.3 billion, and fold the US Agency for International Development into the State Department.

And he warned that he would withhold “billions” from countries that voted against him. “Let them vote against us,” he said. “We’ll save a lot. We don’t care.” “But this isn’t like it used to be where they could vote against you and then you pay them hundreds of millions of dollars,” he added. “We’re not going to be taken advantage of any longer.”

Trump’s warning appeared aimed largely at countries in Africa, Asia and Latin America who are regarded as more vulnerable to US pressure.

More recently, offended by Palestinian President Mahmoud Abbas’s sharp criticism of the Jerusalem move, Trump ordered that $65 million in US aid be withheld from the UN refugee agency that serves the Palestinians.

At least 11 countries, including Russia, Belgium and Norway, have

rushed to pay their own annual contributions early and in full, to fill the gap. Pressed by Norway, the European Union held an emergency session last week to seek faster contributions to the refugee agency.

Even the Israeli government has quietly criticized the cut to the agency, which provides much of the schooling and health care in Gaza and the West Bank, meaning that Israel, considered by most of the world as an occupying power, is not under obligation to do so.

Bildt suggested that the Europeans should not contribute more, but let Israel cope with the fallout of the aid cut. Noting that Israel was lobbying in Washington against the cutbacks, he asked: “Why should we jump in there? If it collapses, it is the responsibility of the occupying country, Israel, which should pay the costs of its occupation.”

Trump has also suspended aid to Pakistan over its ties to the Taliban, and that is a more popular act, said Ian Lesser, a former US official who runs the German Marshall Fund office here.

“On Egypt and especially Pakistan,” which receive large amounts of United States aid, “a lot of the foreign-policy establishment will agree,” he said. “There’s a lot of pentup dissatisfaction with countries that have not been helpful.”

“With some key countries,” he added, “it could be that Trump’s assertiveness comes together with this pent-up frustration to produce change.” New York Times News Service

way back to 1928.

Michael Purves, Weeden and Co.’s chief global strategist, says investors should get used to turbulence given the strength of the market’s run-up.

But it shouldn’t derail a bull market that is seven months away from becoming the longest ever.

“I’ll bet you a bag of donuts that

by Wednesday or Thursday of next week the equity market starts finding its footing against the backdrop of more stable bond yields,” Purves said. “And then, like any bottoming process, the market tests it and tests it again and then all of a sudden, boom, new buyers come in.”

“The overall complexion here is that earnings have been pretty robust, economic data is holding together well, inflation is starting to pick up—there’s nothing really different in terms of an overall bull trend,” he said. “We were way over extended on the way up, we were so immune to it. I think we could get another 2-percent or 3-percent down.

That would retract back to December levels when things went bonkers.”

Bloomberg News

Saudi hospitals to hire Goldman and JP Morgan

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audi Arabian hospitals operator Al Hammadi Co. for Development and Investment is close to hiring Goldman Sachs Group Inc. to advise on merger talks with National Medical Care Co., according to people with knowledge of the matter.

Al Hammadi could finalize appointing Goldman Sachs in coming days, the people said, asking not to be identified because the information is private.

The mandate isn’t final and the company’s plans could change, they said.

National Medical Care is likely to work with JPMorgan Chase and Co., they said.

A representative for Al Hammadi said the company would select an adviser soon, without providing any additional details. Spokesmen for Goldman Sachs and JPMorgan declined to comment.

National Medical Care didn’t respond to requests. The two companies said last August they were in preliminary discussions about a potential merger that would create a company with a combined market value of $1.9 billion.

Mergers and acquisitions in Saudi Arabia are set to pick up as slower economic growth encourages more tie-ups between firms, and new takeover rules are poised to make it easier to do deals.

HSBC Holdings Plc.-backed Saudi British Bank and Alawwal Bank, in which Royal Bank of Scotland Group Plc. owns a 40-percent stake, are in talks to merge, while Jabal Omar Development Co. also hired Goldman Sachs to advise on a potential merger with Umm Al Qura Development, the company said last November. Bloomberg News

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Trump wages war on a pillar of society: Law enforcement

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ASHINGTON—In the days before the 2016 election, Donald J. Trump expressed “great respect” for the “courage” of the Federal Bureau of Investigation (FBI) and Justice Department for reopening the investigation into Hillary Clinton’s private e-mail server.

Sixteen months later, he has changed his mind. The agencies have been “disgraceful” and “should be ashamed,” Trump declared last Friday.

Under attack by the president, the deputy FBI director, Andrew G. McCabe, was pushed out in recent days. Trump has hinted he may fire the deputy attorney general, Rod J. Rosenstein. And his aides fear that Christopher A. Wray, his FBI director, may resign over the dispute with the bureau, although associates doubt it.

The war between the president and the nation’s law-enforcement apparatus is unlike anything America has seen in modern times. With a special counsel investigating whether his campaign collaborated with Russia in 2016 and whether Trump obstructed justice in 2017, the president has engaged in a scorched-earth assault on the pillars of the criminal justice system in a way that no other occupant of the White House has done.

The president’s focus on a memo drafted

by Republicans on the House Intelligence Committee and released last Friday reflected years of conspiracy-minded thinking by Trump.

“Something is going on, folks,” he would warn at his campaign rallies. He has long sought to find the hidden hand at work behind the scenes in the government, and he has encouraged supporters’ suspicions of a “deep state” organized to resist the policies of an elected president.

At the start of his administration, Trump targeted the intelligence community for his criticism. But in recent months, he has broadened the attacks to include the sprawling federal law-enforcement bureaucracy he oversees, to the point that last December he pronounced the FBI’s reputation “in tatters” and the “worst in history.”

In his telling, that bureaucracy—now run by his own appointees—is a nest of political saboteurs out to undermine him—an accusation that raised fears he was tearing at the credibility of some of

Andrew McCabe, the acting Federal Bureau of Investigation director, during a Senate Intelligence Committee hearing in Washington on May 11, 2017. The war between the president and the nation’s law-enforcement apparatus is unlike anything America has seen in modern times. Under attack by President Donald J. Trump, McCabe was pushed out in January. Stephen Crowley/The New York Times

the most important institutions in American life to save himself.

“I can’t think of another time when this has happened,” said Jack L. Goldsmith, a Harvard law professor who headed the Justice Department’s Office of Legal Counsel under President George W. Bush. “And it’s happening largely because the president is being investigated.”

The attacks are having an impact.

A SurveyMonkey poll for Axios, a news web site, released last Saturday showed that only 38 percent of Republicans have a favorable view of the FBI, compared with 64 percent of Democrats.

In interviews, more than a dozen officials who work at or recently left the Justice Department and the FBI said they feared that the president was mortgaging the credibility of those agencies for his own shortterm political gain as he seeks to undercut the Russia inquiry led by the special counsel, Robert S. Mueller III. “Thanks to this rhetoric, there is a subset of the public that won’t believe what comes out of the Mueller investigation,” said Christopher Hunter, a former FBI agent and prosecutor who left the Justice Department at the end of last year.

It’s scary when someone can use the forces of government for their own benefit, the way Nixon did and the way this president is now doing.”

—Davidoff

Hunter said he worried that juries might be more skeptical of testimony from agents even in criminal trials unrelated to Trump.

“All it takes to sink a case,” he said, “is for one juror to disbelieve the FBI.” For some career professionals, a siege mentality has taken hold.

“Until recently, people in the department were in raised eyebrow mode,” said Sharon McGowan, a former principal deputy chief of the appellate section of the civil rights

division of the Justice Department who left soon after the new administration took over. “But now they’re starting to get worried.”

Since taking office, Trump has assailed a number of major institutions in society, including Congress, the courts, the news media, intelligence agencies, Hollywood, professional sports and even his own party.

But the attacks on law enforcement are tied up with his own political fate as investigators bear down.

The closest analogy historians summon is the Saturday Night Massacre in 1973, when President Richard M. Nixon ordered the firing of the Watergate prosecutor, and both the attorney general and his deputy resigned rather than comply, leaving it to the Justice Department’s No. 3 official to carry it out.

Even then, Nixon was publicly targeting the prosecutor, not the institutions themselves.

Ever since, the notion of a president dismissing investigators looking at his own actions had been unthinkable in Washington—at least until Trump fired James B. Comey, the FBI director, last year.

President Bill Clinton’s surrogates relentlessly criticized Kenneth W. Starr, the independent counsel investigating him, but ousting him was never a viable option, and as much as Clinton detested Louis J. Freeh, the FBI director at the time, he did not launch a sustained public attack on him or the agency.

Even before this past week, Trump had publicly assailed Attorney General Jeff Sessions for recusing himself from the Russia investigation and left open the possibility that he might even fire him.

Last summer, Trump sought to fire Mueller, only to back down after the White House counsel threatened to resign, The New York Times reported last month. He also considered firing Rosenstein, who oversees Mueller.

“It’s scary when someone can use the forces of government for their own benefit, the way Nixon did and the way this president is now doing,” said Sidney Davidoff, a onetime adviser to Mayor John V. Lindsay of New York and one of 20 people on Nixon’s original enemies list. “As an attorney and as a private citizen, I’d like to believe that the investigatory agencies are doing a job for the American people, not at someone’s whim. It’s not a monarchy.”

Trump’s advisers dismiss such concerns as overwrought. They said the memo, drafted by Republicans led by Rep. Devin Nunes of California, the Intelligence Committee chairman, and declassified

by Trump, raised serious and legitimate questions about the way the FBI used information gathered by a former spy paid by Hillary Clinton’s campaign and the Democrats to help justify a warrant for surveillance on a former Trump campaign adviser tied to Russia.

Trump’s critics, his advisers argue, are turning a blind eye to government misconduct out of their own partisan animus toward the president.

Neither the FBI nor the Justice Department should be above questioning, they say, and Trump’s willingness to do so should not be taken as a slight against the vast majority of people who work there.

“The president has stated many times that he respects the rank and file of the FBI, the 25,000 men and women who do a great job there,” Kellyanne Conway, the president’s counselor, said on Fox News. “This particular investigation has taken a lot of twists and turns, and it’s led us to a few bad actors who had direct responsibility for an investigation about his political opponent who are obviously biased against him.”

Trump seized on the memo last Saturday to assert that it renders the Russia investigation moot.

New York Times News Service

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Monday, February 5, 2018

A9

EU willing to discuss citizens’ rights after Brexit

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he European Union may be willing to discuss residency rights for EU citizens arriving in the United Kingdom after Brexit, a senior European Union official said, in what could signal a less rigid approach from the bloc ahead of this week’s separation talks in Brussels.

While the EU won’t accept an end to the freedom of movement during the transitional period after March 2019, the fate of those who move to Britain after its withdrawal from the bloc and haven’t stayed long enough to acquire residency rights by December 2020 is a legitimate question, the official said.

Under European Union law, permanent residence rights are automatically granted after five years.

UK Prime Minister Theresa May has vowed to fight the EU’s attempts to extend protection for expats as a condition for a transition period of 21 months. Britain’s leader said there should be different rights for European nationals who arrive in the United Kingdom before Brexit day next year compared with those

who go there during the transition.

The European Union wants the cut-off date for citizens-rights acquisition to coincide with the end of the transitional period on December 31, 2020; the details of the arrangement are subject to negotiations set to begin this week in Brussels.

Britain wants to reach a deal on transition by the end of March, as any further delay would raise doubts about its usefulness in cushioning the impact of Brexit.

Within reach

A compromise on the rights of citizens would still leave several thorny issues to be resolved before a deal is within reach: Even as the UK accepts that it will have to abide by EU laws

during the transition period, it demands to have a say over legislation that could be harmful to its interests, a demand that the European Union has rejected.

The EU would only grant limited access to its single market for United Kingdom banks following the end of the transition, and only on the condition that Britain stays aligned with the bloc’s regulatory standards.

The UK wants instead a trade deal with the European Union that will also include access for

financial services.

The bloc’s chief Brexit negotiator, Michel Barnier, will meet with Brexit Secretary David Davis in London on Monday, before officials from both sides begin three days of talks in Brussels, starting on Tuesday.

In addition to transition and the plans for the future relationship, the talks will also revisit issues still unresolved from the first stage of negotiations, including the Irish border. Bloomberg News

The British Parliament with the Big Ben Bloomberg News

Cape Town’s water crisis highlights rich-poor divide

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APE TOWN, South Africa—”Day Zero” is approaching as South Africa’s showcase city of Cape Town prepares to turn off most water taps, amid the worst drought in a century. Tensions among the 4 million residents are highlighting a class divide in a country with one of the world’s highest rates of inequality.

Cape Town, a top international tourist destination, has both sprawling informal settlements and high-income oceanside neighborhoods. Some say poorer residents are unfairly blamed as concerns rise over wasting precious water. The military is prepared to help secure water collection points if Day Zero occurs.

The Associated Press is exploring how residents are coping, as water restrictions tighten in an attempt to avoid the possible shut-off in mid-April, and it spoke with researchers about where the water usage problems lie.

Kirsty Carden with the Future Water Institute at the University of Cape Town pointed to the city’s leafy suburbs.

“It has been in the areas where people have gardens, they have swimming pools and they are

much more profligate in the way that they use water, because they’re used to the water just being, coming out of the taps,” she said.

Some residents appear to be changing their ways, she said, but “there have been problems in the more affluent areas where people are just, ‘We’ll pay for it.’”

About a quarter of Cape Town’s population lives in the informal settlements, where they get water from communal taps instead of individual taps at home, Carden said.

“And there are always pictures of running taps and broken fixtures and ‘Look at the leakage’ and all the rest. But the reality is that those 1 million people out of a population of 4 [million] only use 4.5 percent of the water.”

In one of the crowded settlements of corrugatedmetal homes, resident Vuyo Kazi washed her laundry outside as others poured used water into the street.

“Before, I was using two kettles of water to wash myself,” she said. “So now I use one kettle of water.”

Under new water restrictions that began last Thursday, residents are asked to use no more than 50 liters of water daily, down from the previous limit of 87 liters.

The use of city drinking water to wash vehicles, hose down paved areas, fill up private swimming pools and water gardens is illegal. Residents using too much water will be fined.

Across the city, in the seaside town of Scarborough, resident Kelson da Cruz demonstrated the new normal of water rationing, pointing out the bucket beside his shower. The city has even promoted a Two-Minute Shower Songs project by top South African artists to keep water usage down.

“We are restricted with an amount of the water that we can use per day,” da Cruz said. “So we collect that water, and that water you can use to flush the toilet.”

Another jar of water is used for tooth-brushing and face-washing.

Some 70 percent of water used in Cape Town is consumed in homes, authorities say. Experts have said causes of the city’s water shortages include climate change and huge population growth. The local reliance on reservoirs, while projects, such as desalination plants, were largely left to the future, has been hurt by three straight years of drought.

Scientists are watching how authorities cope, as this would be the world’s first major city to go dry.

“We always open the tap, the water is there, easy,” da Cruz said. “I was lucky to travel to some dry countries where water has always been a big issue. So when we moved to South Africa that has always been on the back of our mind.

“And I think South Africa is for the first time is really catching up with the rest of the world. They have to change their habits. You can’t just take for granted something so precious.” AP

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China criticizes US for nuke claims

AN American flag is flown next to the Chinese national emblem during a welcome ceremony for visiting US President Donald J. Trump outside the Great Hall of the People in Beijing on November 9, 2017. AP/Andy Wong

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EIJING—China last Sunday criticized a US government report that cast Beijing as a potential nuclear adversary and called on Washington to reduce its own much-larger arsenal and join in promoting regional stability.

A Defense Ministry statement said China’s nuclear arsenal is the “minimum level” required for security. It pledged never to be the first to use nuclear weapons “under any circumstances.”

The sweeping United States

nuclear strategy review issued last Friday said Washington wants to prevent Beijing from mistakenly concluding that any use of nuclear weapons, however limited, is acceptable.

“The Chinese side expresses firm opposition” to the report, said a min-

istry spokesman, Ren Guoqiang.

“We hope the US will abandon a Cold War mentality and earnestly shoulder its special and prior responsibility for its own nuclear disarmament,” added Ren. The ruling Communist Party’s military wing, the People’s Liberation Army, has the world ’s fifth-largest nuclear arsenal, with 300 warheads, according to the Stockholm International Peace Research Institute.

The United States and Russia each have about 7,000 warheads, or about 20 times as many as Beijing.

Beijing has rattled Japan, South Korea and Southeast Asian governments with increasingly assertive gestures and belligerent comments aimed at enforcing its

claims to disputed islands and swathes of ocean.

Last December China sent bombers and fighter planes to fly around Taiwan, the self-ruled island the communist mainland claims as its territory. The warplanes flew near South Korean and Japanese air space, prompting Japan to dispatch fighter jets to intercept them.

The Defense Ministry statement said global peace and development “are irreversible trends” and called on Washington to work with Beijing to “jointly safeguard peace, stability and prosperity in this region and the world.”

President Donald J. Trump’s nuclear doctrine breaks with his predecessor, Barack Obama, by ending a push to reduce the role of nuclear weapons in United States military policy.

In a written statement, Trump last Friday said US strategy is designed to make use of nuclear weapons less likely. But arms control group criticized it as reckless.

Last Friday’s report endorsed adhering to US arms control agreements, including the New Strategic Arms Reduction Treaty that limits the United States and Russia each to 1,550 strategic nuclear warheads on a maximum of 700 deployed launchers.

The US government says it has been in compliance since August and expects Moscow to comply by the deadline, which is Monday. AP

We hope the US will abandon a Cold War mentality and earnestly shoulder its special and prior responsibility for its own nuclear disarmament.”

—Ren

4,400-year-old tomb discovered outside Cairo

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AIRO—Archaeologists in Egypt have discovered a 4,400-year-old tomb near the country’s famed pyramids at the Giza plateau just outside Cairo, the Antiquities Ministry said last Saturday, the latest discovery that authorities hope will help revive the country’s staggering tourism sector.

The tomb was found in a wider area of Giza’s western necropolis, which is known to be home to tombs from the Old Kingdom.

It likely belonged to a woman known as Hetpet, who archaeologists believe was close to ancient Egyptian royals of the fifth dynasty.

The tomb, unveiled to the media last Saturday, is made of mud brick and includes wall paintings in good condition depicting Hetpet observing different hunting and fishing scenes.

Other scenes also depict a monkey—in pharaonic times, monkeys were commonly kept as domestic animals—picking fruit.

Similar scenes have been found in other tombs belonging to the later 12th dynasty, according to the ministry’s statement. Another scene shows a monkey dancing before an orchestra.

According to the ministry, the archaeological mission behind the discovery started excavation work last October. Archaeologists have been making discoveries near the site since the 19th century, and Mostafa al-Waziri, who led the mission, believes there is still more to be found.

“This is a very promising area.

We expect to find more,” Al-Waziri told reporters at the site. “We have removed between 250 to 300 cubic meters of layers of earth to find the tomb.”

“What we see above the Earth’s surface in Egypt doesn’t exceed 40 percent of what the core holds,” he added.

Al-Waziri believes Hetpet had another tomb in Giza’s western necropolis and said that excavation work is under way to find that one, too.

Hetpet is a previously known figure in Egyptian antiquity though her mummy has not been discovered yet. Fragments of artefacts belonging to Hetpet were found in the same area back in 1909, and were moved to a museum in Berlin at the time, Antiquities Minister Khaled al-Anani said last Saturday, speaking at the site to reporters and Western diplomats.

Despite all the discoveries already made about ancient Egypt, experts say they hope to find much more— in part thanks to modern technology—treasures still buried under the vast desert.

The area of the latest discovery is close to a new museum under construction that will house some of Egypt’s most unique and precious artifacts, including many belonging to the famed boy King Tutankhamun.

The first phase of Grand Egyptian museum is expected to be opened later this year while the grand opening is planned for 2022.

In January Egypt placed the ancient statue of one of its most famous pharaohs, Ramses II at the museum’s atrium, which will include 43 massive statues.

Throughout 2017, the Antiquities Ministry made a string of discoveries across Egypt—including some in the southern city Luxor known for its spectacular temples and tombs spanning different dynasties of ancient Egyptian history.

Egypt hopes the inauguration

of the new museum, along with the recent discoveries, will draw back visitors to the country where tourism has been hit hard by extremist attacks and political turmoil following the 2011 popular uprising that toppled longtime autocrat Hosni Mubarak and the authorities’ struggles to rein in an insurgency by Islamic militants.

The government has tightened security around archaeological and touristic sites and spent millions of dollars to upgrade airport secu-

rity, especially following the 2015 downing of a Russian airliner over the restive Sinai Peninsula by the Islamic State group, killing 224 people onboard.

The bombing dealt Egypt’s vital tourism sector a hard blow after Russia suspended flights to and from Egypt.

Last December Cairo and Moscow signed a security protocol and announced plans to resume Russian flights to the Egyptian capital, due to start this month. AP

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Bulgaria pushing hard to join Europe’s core

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S the European Union (EU) picks itself up from multiple crises and maps the way ahead, some members are finding they are less welcome than others to share the road.

Bulgaria aims to join the euro area, as well as the EU’s passportfree travel zone known as Schengen, and meets the criteria to advance on both fronts. But in each case, reservations in some richer European Union countries are slowing the process.

The former communist nation, which buttresses the EU’s strategic southeastern flank, is a test case for the bloc’s efforts to integrate more closely to meet challenges, such as rising global protectionism and the threat of another wave of refugees from the Middle East and Africa.

Along with shoring up the euro area, the European Union aims to ensure continued economic clout after the United Kingdom (UK) leaves in little more than a year.

“Bulgaria’s choice is to be part of the core,” Foreign Minister Ekaterina Zaharieva said in a January 30 interview in Brussels. “We have a clear agenda and a clear priority.”

‘Purely political’

Germany, still smarting after 10 years fighting the Greece-triggered debt crisis, is helping apply the brake to Bulgaria’s euro aspirations, while the Netherlands, home of a strong anti-immigration party, and France, which has suffered high-profile terrorist attacks in recent years, are among the EU countries acting as a check on any Schengen enlargement, according to officials in Brussels, Berlin and Sofia, who spoke on the condition of anonymity.

While German Chancellor Angela Merkel said last June that she wanted Bulgaria to join the euro “as quickly as possible,” the current hiccups in the process reveal a common gap in the European Union between translating political declarations into policy realities, especially when it comes to financial matters. Greece regularly faced similar situations during negotiations over rescue aid.

“All the reservations have been purely political,” Zsolt Darvas, a fellow at the Bruegel think tank in Brussels, said in an interview. “There are double standards. Accepting Bulgaria as a new euro member should not be a problem.

Bulgaria will not become Greece.”

Bulgaria, which is planning a bid to join the exchange-rate regime (ERM-2) that’s part of the road to euro accession, ticks all the economic boxes. It’s national currency, the lev, is already pegged to the euro; public debt is well below both the euro area’s average and the cap set in the EU rulebook; and the nation is running a budget surplus, comfortably far from the European limit for deficits of 3

percent of gross domestic product.

The Balkan nation has also excelled when it comes to the conditions for joining Schengen.

European Commission President Jean-Claude Juncker said in September that Bulgaria, along with Romania, should become part of Schengen “immediately” because they met all the technical requirements.

Bulgaria’s Zaharieva said the country has been ready to join Schengen “for many years” and that “this double standard should not exist.”

Berlin’s stalling tactics over the monetary question are entwined with a continuing European Central Bank (ECB) evaluation of Bulgaria’s fitness for the 19-nation euro area.

The German finance ministry welcomed “the interest shown by member states in joining the euro area,” while stressing the need for the ECB to complete its evaluation.

“The ECB in particular is called upon to carry out a detailed assessment, including aspects of sustainability,” said Dennis Kolberg, a spokesman for the ministry in Berlin. “The finance ministry will not prejudge this assessment.”

A spokesman for the ECB said it is working on the assessment, which is due to be published in May. Some officials say concerns over Bulgaria’s readiness for the single currency stem from the prospect of inflation tied to strong catch-up growth in the country and the demands of EU banking-union rules meant to prevent future financial turmoil.

‘Excellent pupils’

Other officials point to Bulgaria’s level of corruption—the worst in the EU, according to Transparency International. They say the euro area must look beyond hard economic criteria to the strength of national institutions when considering opening the door to new members.

On January 11 Bulgarian Finance Minister Vladislav Goranov said the government intended to apply by July for ERM-2 entry.

He also said the government would be prepared to do so even without a signal from the euro area that such a step would be welcome as a way to force a European political debate about the prospects for Bulgaria’s membership of the euro.

“We need a certain direction about what we are supposed to do,” Goranov said in Sofia. “If we look at the purely formal criteria, we are excellent pupils.”

With Merkel still working to form a coalition government for her fourth term after national elections in September that featured a rise in anti-EU forces, Juncker last month could offer only vaguely optimistic remarks to Bulgarian authorities. Bloomberg News

Wall paintings inside a 4,400-year-old tomb near the pyramids outside Cairo, Egypt, were taken from video on February 3. Egypt’s Antiquities Ministry announced the discovery and said the tomb likely belonged to a high-ranking official known as Hetpet during the fifth Dynasty of ancient Egypt. AP/APTN

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Editor: Jun B. Vallecera • Monday, February 5, 2018 A11

SSS still looking to invest overseas

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he Social Security System (SSS) is actively looking for a fund manager to handle that portion of its portfolio that could be invested abroad, its president and CEO said last Friday.

Emmanuel F. Dooc, SSS president and CEO, said there is an ongoing endeavor to hire a foreign fund manager and that there are active negotiations at the moment to try and find a perfect fit.

Dooc said the state-run pension fund looks to diversify its investment portfolio and that management has not had an investment overseas, although its charter allows for overseas investing.

“That’s why we also got in touch with some investments advisers from abroad, and for diversification purposes. We don’t like to restrict our investments in one basket in the local economy, so we will definitely study it,” Dooc told financial reporters.

A year ago, the SSS said the same thing.

Under the SSS Charter, the pension fund is allowed to invest 7.5 percent of its portfolio in overseas markets. The SSS has around P490 billion in investments from which it earns an average return of 7 percent.

“What we need is expert advice. We have to get fund managers that are well-versed in international or foreign investments,” he said.

The erstwhile top dog at the Insurance Commission bared the proposed foray in the global investment market in the wake of a presidential mandate to increase the pension benefits of SSS member, a mandate that caught the fancy of most everyone that has worked in the private sector but entails reworking investment activities of the fund given the costs involved.

The hike in pension benefits shortens the socalled actuarial life of the fund and, thus, the need for management to optimize their investment activities in addition to making sure that the

contribution of members are similarly adjusted.

According to Dooc, the Government Service Insurance System (GSIS), that services the pension benefits of government workers has trillions of pesos in its reserve fund that allows its to address the benefits of its members without adversely affecting its actuarial life.

“We would like also to do the same thing.

Right now, although we are allowed to do foreign investments, we have not invested overseas.

But, based on the experience of GSIS, which reported good returns, we will also consider that,” he said.

He also said the proposed SSS charter amendment allows the Social Security Commission (SSC) to adjust investment ceiling as they see fit going forward. The proposed SSS charter amendments are at the Senate committee level at the moment.

“The amendment will empower us to recast or redistribute the ceilings. So we can say, set aside a bigger percentage depending on the SSC,” Dooc said.

In January the GSIS bared a plan to invest some $800 million of its investment portfolio to take advantage of prevailing conditions in the various markets overseas.

GSIS President and General Manager Jesus Clint O. Aranas said the ideal rate of return they look forward to is 9 percent. The average rate of return for such placements at the moment is only 5 percent more or less.

The GSIS is also actively looking for at least two external fund managers to help them deploy the $800 million.

“We currently don’t have overseas fund managers,” GSIS Senior Vice President Gracita Gilda V. Bocanegra said.

TRANSPARENT RETAIL PAYMENT SYSTEM

The Bangko Sentral ng Pilipinas (BSP) and Philippine Payments Management Inc. (PPMI) signed a memorandum of agreement (MOA) on January 12, at the BSP Manila. Present at the MOA signing are BSP Deputy Governor Maria Almasara Cyd N. Tuaño-Amador (seated, from left), BSP Governor Nestor A. Espenilla, Jr., PPMI Chairman of the Board Justo A. Ortiz and PPMI President Abraham T. Co. BSP Deputy Governor Chuchi G. Fonacier, NRPS Core Team Chairman Raymond O. Estioko and the rest of the PPMI Board of Directors were also present to grace the event.

Under the signed MOA, the BSP recognizes PPMI as the payment system management body, while the PPMI recognizes the authority of the BSP as the primary overseer of the retail payment system given its critical role in the financial infrastructure as envisioned under the NRPS Framework.

Perspectives The connected ecosystem: A new business model for insurers

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he impacts of new and developing technologies have dominated recent conversations about the future of the insurance industry—and for good reason. Advances in robo advisory, AI, big data, analytics and more are reducing costs, increasing efficiency and improving customer service.

Yet, in addition to the advances driven by insurtech and B2B technology innovations, a deeper transformation is underway. Instead of approaching insurtech from a technology perspective, forward-thinking insurers are embracing disruptive innovation to reimagine the relationship between the insurer and the insured, to create a new insurance business model.

One particularly interesting area where we are seeing this type of transformation is in “connected insurance.” Connected insurance envisions a new role for the insurer as an active supporting participant in the customer’s daily life.

A new way to connect to customers

Traditionally, a customer only thinks of insurance in the wake of a purchase or life event, whether that’s buying a home or vehicle, going through a life change, or needing to make a claim. In recent years, insurers have been attempting to make the shift from providing protection from the impacts of unfortunate events, to helping prevent these events from occurring. Connected insurance takes things one step further, creating an active role for the insurer in the customer’s daily life and activities, from creating a meal plan to monitoring a pregnancy.

While, historically, insurers have provided products based on customers’ risk profiles, connected insurance requires the insurer to, instead, think about the customers’ lifestyle.

As lifestyle is often dependent on life stage and other demographic factors, insurers pursuing a connected insurance approach must focus on specific customer segments, develop an in-depth understanding of that customer type, and then seek ways to seamlessly integrate into the customer’s lifestyle.

Technology makes lifestyle-integrated interactions possible. The advanced capabilities

and widespread availability of consumer-focused devices, such as smart phones, Internet of Things (IOT) enabled appliances, health monitors and more, are providing unparalleled abilities for individuals to manage their lives online.

At the same time, big data, analytics and other tools employed by insurers can unlock powerful insights from this information that can be used to better understand the customers and provide the appropriate connections within the connected ecosystem. That data can then be used to enhance underwriting decisions and refine pricing for smaller, targeted customer segments, as opposed to one, blended rate for all.

Creating a connected ecosystem

There are three core areas where we are currently seeing the development of connected insurance: health, home and transportation.

In a connected health ecosystem, the insurer works as a full-service customer concierge for medical care. Personal medical monitoring devices and wearables allow customers to track health information, such as weight and BMI, heart rate and pulse, blood sugar, exercise activity and more. With these devices connected through an app, the insurer could transfer data to a medical practitioner for ongoing monitoring. Should concerns arise, the insurer could not only provide support to make medical appointments or expedite treatment but also to arrange transportation, from requesting a taxi to calling an ambulance. Lifestyle supports, such as recommending healthy meal plans, giving tips or reminders, or providing discounted gym memberships can also assist customers to lead healthier lives.

Recently, KPMG professionals worked with an insurer in Singapore and developed a “connected health” diabetes-management program, which allows the insurer to provide affordable health insurance to early stage diabetes patients, who would otherwise not be able to avail themselves of any medical coverage once the diabetes is detected.

Networked IOT devices allow an insurer to provide round-the-clock support in the home, especially for seniors or other at-risk custom-

ers. Yet, in addition to medical monitoring and support, a connected home can also enable insurers to provide home owners and renters with greater comfort and security. Support could range from remote early detection of problems, such as leaks, shorts or floods, to arranging appointments with repair professionals.

When it comes to automobile insurance, a connected car is an area of particular interest. While early telematics were intrusive and had a correspondingly low adoption rate, new apps use the smartphone’s built-in gyroscope to seamlessly provide telematic data. This enables the insurer to easily identify the driver, track behavioral driving patterns and reward drivers for positive driving habits. Insurers can then create recommended ecosystems of service providers or gas stations at which customers can spend their “good driving points” for free products or discounted service.

Shifting mind-set to create value

With the rise of the gig economy and other factors increasingly pushing people from asset ownership toward asset usage, insurers will need to find ways to connect with customers and provide value in all aspects of their lives. Connected insurance uses technology to make the insurer a core partner in the customer’s life, providing not only emergency assistance and preventative help but also ongoing, seamless support.

The future of insurance is not about the product or technology.

Instead, the way forward requires a shift in mind-set: making the customer the priority, with the insurer delivering daily value as the center of a wider ecosystem of trusted providers.

The article “The connected ecosystem: A new business model for insurers” is written by Chia Tek Yew, KPMG in Singapore. © 2018 R.G. Manabat & Co., a Philippine partnership and a member-firm of the KPMG network of independent member-firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the Philippines.

For more information on KPMG in the Philippines, you may visit www.kpmg.com.ph.

Deutsche bank investors see no silver lining as results drop

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eutsche Bank AG investors searching for good news after the bank’s third straight annual loss found little to give them optimism.

The Frankfurt-based lender, which had already guided for a slump in trading earnings, surprised with revenue that fell to the lowest in seven years and declines at businesses from transaction banking to equity derivatives.

Even cost control—a key feature of CEO John Cryan’s tenure—was worse than expected.

“The results are disappointing again and we don’t see anything encouraging in them, reinforcing our doubts in the bank’s strategy and management,” Michael Huenseler at Assenagon said. “There’s no silver lining.”

Cryan, who again expressed the bank’s dissatisfaction with the results, is still holding out hope for a return to growth in 2018, saying that he expects higher returns with sustained discipline on costs and risks. Client activity picked up in January, he said, pointing to good economic growth in all major global markets. The bank is paying a oneoff bonus to its corporate and investment bank as it seeks to strengthen the business, he said.

Investors were unconvinced by Cryan’s pledge for growth, which echoed similar predictions by the bank a year ago. The shares fell as much as 7.1 percent in Frankfurt, the most since March, and were 5.4 percent lower at €13.98 as of 2:13 p.m. local time.

Cryan, 57, is running out of time to show he can lead Europe’s

largest investment bank back to strength, after more than two years of scaling back risk, improving controls and settling legacy misconduct cases. The cerebral Brit has defended his strategy, saying two weeks ago that his turnaround plan had entered a “third phase” in which growth should finally be restored.

“What must frustrate investors, in the stock in particular, is the lack of positive news,” said Gildas Surry, a portfolio manager at Axiom Alternative Investments in London, which manages about $1.3 billion, including Deutsche Bank bonds. “FICC down, financing down, costs up, loan provisions down.”

The CEO raised capital in the past year, reorganized the bank’s divisions, prepared the asset management arm for a partial public offering and is working to reintegrate the Postbank consumer lending unit. Yet, several of his shareholders, penalized by the worst performance among European bank stocks in the past year, have signaled they may stop backing him if the numbers don’t improve soon.

To be fair, much of what’s driving the ongoing slump in revenue—a lack of volatility in markets, writedowns tied to the US tax reform—is beyond the control of the CEO, and has driven comparable results at the bank’s Unitred States peers. Goldman Sachs Group Inc.’s fixed-income unit turned in its worst performance in more than a decade last quarter, with a slump of 50 percent. Bloomberg News

Case clippings

By Justice S J Ranada Jr.

AGRARIAN REFORM–abandonment by beneficiary Abandonment disqualifies the beneficiary of the lots awarded under Presidential Decree 27. For abandonment to exist, there must be (1) a clear intent to abandon; and (2) an external act showing such intent. The intent to abandon must be deliberate and clear, established by the factual failure to work on the landholding without any valid reason, as well as a clear intent, which is shown as a separate element.

Digan v. Malines 06 Dec. 2017

GR 183004 Martires, J

Green Monday BusinessMirror

A12 Monday, February 5, 2018

www.businessmirror.com.ph • Editor: Lyn Resurreccion

South Africa’s Cape Town faces the dreaded ‘Day Zero’ in water

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OHANNESBURG—South Africa’s government has no immediate plans to allocate funds for drought alleviation in the water-deprived Western Cape Province, Water and Sanitation Minister Nomvula Mokonyane told reporters in Cape Town.

Cape Town, the continent’s top tourist destination, is in the throes of the worst drought on record, with the winter rainy season still about four months away.

The city has made a little progress in staving off the dreaded Day Zero, the date when it might have to turn off most taps because of water shortages.

The country’s main opposition leader said last Tuesday that Day Zero had been pushed back by four days, from Apil 12 to April 16, because of efforts to save water by residents.

Mmusi Maimane, whose Democratic Alliance party runs Cape Town and the surrounding province, says residents must use fewer than 50 liters (13.2 gallons) per person daily to avoid the tap closure altogether.

Maimane says aquifer drilling is accelerating and that authorities will reduce water pressure in the municipal system in coming weeks.

Experts say causes of Cape Town’s water shortages include climate change and huge population growth.

The metropolis could be the

world’s first major city to run out of water.

The city’s 4 million residents may find themselves lining up for a daily allocation of 25 liters (6.6 gallons) each.

“Urban and agricultural water users have exceeded their water use for the hydrological year already,” Trevor Balzer, deputy director general in the Department of Water and Sanitation, said at the same briefing the other Sunday.

“That is why we have switched off agricultural water users already.”

Water crisis is credit-negative

A s Cape Tow n’s dam levels fall, t he c it y m ay see bor row i ng costs r ising.

The water crisis afflicting Africa’s top tourist destination is credit-negative, as it will reduce revenue at a time when the city has to boost spending to ensure supplies, Moody’s Investors Service said in a report last Monday.

The report does not constitute a rating action, said Moody’s, which has an investment-level rating on Cape Town’s bonds. Municipal water revenue contributed about 10 percent of Cape Town’s

A resident carries a plastic container of water after filling from the communal tap in the Imizamo Yethu township outside Cape Town, South Africa, on November 13, 2017. Waldo Swiegers/Bloomberg

operating income in 2017, a proportion that is set to dwindle as the city restricts water usage.

At the same time, spending on crisis management and water-supply projects will increase, Moody’s Associate Analyst Daniel Mazibuko said in the report.

Two main industries—tourism and agriculture—will feel the effect, leading to lower employment and tax income, he said.

“Other effects include threats to public health from poor sanitation and, more generally, to social order, which is significant given Cape Town’s marked income inequality,” Mazibuko wrote. “If the crisis persists, it remains to be

seen how the city will cope with the unfolding crisis’s potentially wide-ranging consequences on the city’s finances and economy.”

Cape Town is in the throes of the worst drought on record, and water levels in its six main supply dams have plummeted to an average of 26.3 percent, from more than 90 percent four years ago.

With the winter rainy season still about four months away, residents may find themselves lining up for a daily allocation of 25 liters (6.6 gallons) each from April 12, unless water usage declines sharply. The city last accessed the bond market last July, when it sold 1 billion rand

($84 million) of sinkable securities maturing in 2027. It has a total of 5.2 billion rand outstanding in four bonds, according to data compiled by Bloomberg.

Moody’s rates the debt “Baa3,” the lowest investment level and on par with South Africa’s sovereign rating.

Cape Town’s policy of maintaining a strong liquidity ratio and conservative debt management, with a debt burden of only 11 percent of operating revenue, will help mitigate the effects of borrowing required to implement capital projects over the next three years, Mazibuko said.

Bloomberg News and AP

Cambodian forest protectors slain after confronting loggers

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HNOM PENH, Cambodia—Soldiers in nor theastern Cambodia, an area where illicit logging and smuggling are rife, killed a forestprotection ranger, a military police officer and a conservation worker in apparent retaliation for their seizure of equipment from illegal loggers, officials said last Wednesday.

Keo Sopheak, a senior environmental official in Mondulkiri province, said the three-person team was attacked late last Tuesday afternoon after patrolling in the Keo Siema wildlife-conservation sanctuary. He said the dead civilian was a Cambodian employee of the New Yorkbased Wildlife Conservation Society.

The three are the latest victims of an alarming trend in recent years, the murder of environmental defenders by parties seeking the financial exploitation of natural resources.

Roughly 200 activists have been

killed worldwide in each of the past two years, according to the United Kingdombased watchdog group Global Witness.

“The three were killed not by robbers or a guerrilla group but they were shot by government armed forces who backed the illegal timber cutting,” Keo Sopheak said.

The conser vation team had earlier confiscated chain saws and motorcycles from some Vietnamese logging illegally, he added.

A copy of a report sent by Mondulkiri police chief Ouk Samnang to National Police Chief Neth Savouen seen by The Associated Press identified three border security officials who, it said, had shot and killed the conservation team.

The repor t named Phal Penh, a border police officer, Keut Vehar and Ngur, border military officers, as the shooters. Cambodian security forces are known to collaborate with illegal

loggers who smuggle the wood to neighboring Vietnam. The Keo Sieman sanctuary has valuable timber and is a habitat for many wildlife species.

The multi-million dollar illicit trade in wood plagues much of Southeast Asia, with China being the major market and transit point. The trade is vast even though the region has suffered heavily from deforestation for several decades.

In early-2016 Cambodia established a special committee led by army Gen. Sao Sokha to crack down on the smuggling of logs to neighboring Vietnam, and tough-talking Prime Minister Hun Sen said he authorized helicopters to fire rockets at smugglers of illegally cut timber, but there has been no public evidence of a major crackdown.

Keo Sopheak and other officials said a special committee has been established to investigate Tuesday’s attack. AP

School gardens expanded to other Asean countries

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he concept of school gardens has obtained wide suppor t in the Southeast Asian region to focus on the nutrition of schoolchildren and introduce them to agriculture at a young age.

At the 2017 Southeast Asian Ministers of Education Organization (Seameo) High Officials Meeting held in Bangkok, Director Gil C. Saguiguit Jr. of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca) was commended for proposing to education officials from Asean member-states and TimorLeste the proliferation of school gardens throughout the region as a way to address schoolchildren’s nutrition and education needs and to generate interest in agriculture at a young age.

The regional meeting recognized

that the Philippine government-hosted Searca has successfully demonstrated how school gardens can improve the health and nutrition of schoolchildren, while providing oppor tunities for l e a r n i n g by ex p e r i e n ce, a s we l l a s raising the economic well-being of their families.

Saguiguit noted that “credit goes to the Philippines and Searca for piloting the innovative school-gardens concept and showing that it works.”

Th e c e n t e r p i l o t e d t h e s c h o o l gardens program in one high school and five elementary schools in Laguna, in cooperation with the Department of Education Laguna and the University of the Philippines Los Baños.

Labuin Elementary School in Pila won the 2017 Seameo-Japan Education and

Sustainable Development Award for its school-garden project.

Saguiguit said training and other capacity-building activities to transfer the unique school-gardens concept to other Southeast Asian countries will radiate from the pilot schools.

Searca’s school-gardens program is one of its initiatives that are a departure from its traditional way of bringing across its message to promote inclusive and sustainable agricultural and rural development (Isard). Other alternative ways through which Searca promotes Isard are through agri-tourism and the establishment of a Southeast Asian AgriMuseum.

“These may be basic things but they have the potential to enable Searca to better articulate its message and mission,” Saguiguit said.

Regulators vote to protect more corals in Atlantic Ocean

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ORTLAND, Maine—Federal fishing regulators last Tuesday approved a compromise they said would expand the amount of coral habitat preserved in the Atlantic Ocean while also protecting fishing interests.

The New England Fishery Management Council voted on coral protections in an area south of Georges Bank, one of the most important commercial fishing areas in the northeast. The decision came about seven months after the council approved protections in another key New England fishing area, the Gulf of Maine, last June.

Environmentalists, regulators and harvesters of species, including squid, scallops and lobster, have debated the proposal for years. The new protections mean 100,000 square miles (259,000 square kilometers) of deep-sea coral habitat would be protected from the Canadian border to Florida, pro-conservation Pew Charitable Trusts said. The council had a chance to approve a broader coral protection plan but backed off after numerous fishing groups said it was unfairly punitive to the industry.

Peter Auster, marine science research professor emeritus at the University of Connecticut, said the council “took action where none was required” but may have missed a chance at more dramatic protection for corals.

“In all these kind of things, getting some is better than getting none,” he said. “Future actions could still take place.”

Preservation of New England’s slowgrowing, canyon-dwelling corals has long been a subject of debate, and interest in it accelerated a few years ago when thenPresident Barack Obama planned a national marine monument dedicated to saving corals and preserving ocean biodiversity.

Northeast Canyons and Seamounts Marine National Monument, created in 2016, protected about 5,000 square miles (13,000 square kilometers) off New England, but its future is uncertain because of legal challenges and a review by President Donald J. Trump’s administration. Obama is a Democrat; Trump a Republican. AP their ecosystem functions, including carbon sequestration, sheltering fishes and other marine life, protection from strong waves, etc.

But while they appear like “graveyards” for a time, corals can actually recover as long as the water cools down, pollutants are removed, overfishing and other threats are stopped, Haribon said.

Year of the Reef

Bleaching coral, known as “white graveyard,” surrounds Haribon marine Biologist Gregorio de la Rosa as he descends into the deep. Ditto de la Rosa/Haribon Foundation

PHL reef status calls for urgent attention

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he Great Barrier Reef ’s condition is worsening with the devastating bleaching. Recent news reports said a big part of the World Heritage-listed reef off Australia’s northeast coast has been left a white graveyard due to unusually high ocean temperatures, causing mass bleaching of coral expanses in 1998, 2002, 2016 and 2017.

The Philippine coral reefs are bound to the same fate unless something is done about it.

Urgent words and warnings

Is there a way to stop our oceans from warming? What can we do?

Over the recent decades, divers and scientists have witnessed firsthand the alarming damage to the reefs that are vital to the health of the Philippine seas.

Last year a team of divers and marine biologists recorded the occurrence of coral bleaching on the reefs inside and outside of 19 marine-protected areas (MPAs) in Lanuza Bay, Surigao del Sur. “Corals were bleaching between depths

of 3 meters to 30 meters, left and right,” the Haribon Foundation said. The National Ocean and Atmospheric Administration of the United States government raised the bleaching status in Eastern Philippines to Alert Level 2, the highest alert level, in July 2017.

Why corals turn white

There are many reasons corals bleach. It takes place when water temperatures rise, during extreme low tides, high solar light and through run-off from pollution.

When bleaching happens, corals lose their zooxanthellae, the algae that lives inside them in symbiosis or a mutually beneficial relationship.

Zooxanthellae provide corals 80 percent of their food and give them their color.

Without them, corals turn white or very pale.

Different species were losing their zooxanthellae as the temperature rose to 30 degrees Celsius in Lanuza Bay. Once corals turn white, they become very susceptible to disease. They also lose

The International Coral Reef Initiative declared 2018 as the third International Year of the Reef (Iyor). Iyor is a global effort to help raise awareness and urge conservation action on the world’s reefs.

The first Iyor was marked in 1997 in response to the increasing threats and loss of coral reefs, primarily for the largest bleaching event that occurred in recent history. The second Iyor happened in 2008, bringing to attention the value of reefs as a source of livelihood and calamity protection.

This year’s Iyor also seeks to promote partnerships among governments, the private sector, academia and civil society on the management of coral reefs.

The marine-protected areas in Lanuza Bay are managed by community-based organizations and local governments.

The monitoring of the MPAs and the reporting of coral-bleaching events will help managers to develop ways on how to prevent poaching, pollution and other threats from entering the MPAs. This is in coordination with several initiatives where Haribon is involved in, including the Marine Protected Area Support Network and the Philippine Coral Bleaching Watch, an online reporting for bleaching utilizing citizen science.

Through the Strengthening the Marine Protected Areas to Conserve Marine Key Biodiversity Areas in the Philippines Project, Haribon supports the marine-protected area management in Lanuza Bay. The project is implemented by the Department of Environment and Natural Resources and is funded by the Global Environment Facility with support from the United Nations Development Programme.

Biodiversity Monday BusinessMirror

Asean Champions of Biodiversity Media Category 2014

Monday, February 5, 2018 A13

Editor: Lyn Resurreccion • www.businessmirror.com.ph

Biodiversity-rich Mayon to recover fast, sustain life

By Jonathan L. Mayuga

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@jonlmayuga

hile volcanic eruptions are seen as serious threats to life and property, although often a boon to the local tourism industry, the ashfall, burning lava and lahar are threats to the variety of life that thrives around the volcano.

Plants and animals in forests, caves, rivers and other unique ecosystems surrounding volcanoes may be lost during massive volcanic eruptions.

However, there is no need to worry. Experts say the effect of a volcanic eruption is temporary; the forest will eventually recover naturally, and fast, and wildlife will thrive once more, ensuring that the cycle of life goes on.

Natural disasters like f lash floods, landslides, droughts, forest fires, or worse, volcanic eruptions, underscore the need to preserve as many key biodiversity areas as possible to ensure the recovery of degraded ecosystems.

These key biodiversity areas would provide shelter to animal wildlife in the event of disasters and would also become the source of seeds to be dispersed by nature’s best farmers—the birds, the bees and bats—later on.

Volcano country

The Philippines sits on a unique tectonic setting ideal for volcano formation, according to the Philippine Institute of Volcanology and Seismology (Phivolcs).

T he e nt i re a rc h ip e l a go i s sur rounded by subducting pl ates a s m a n i fested by t he trenches that are related to volcano for mation, the Phivolcs, an agenc y of the Depar tment of Science and Technolog y, said in its officia l web site.

There are 24 active and 26 potent i a l ly ac t ive volc a noes in the Philippines, including Mayon Volcano.

Also known as Mount Mayon, the popular volcano, a world-renowned natural wonder because of its perfect, symmetrical conical shape, is one the most active volcanoes in the world.

The most destructive eruption of the Mayon Volcano occurred on February 1, 1814, during which volcanic debris—mostly dark ash devastated the town of Cagsawa.

The trees around it burned and the rivers that sustain life around it were severely damaged.

Ash accumulated to 9 meters in depth. During the eruption, 1,200 locals in Albay province died, according to Mayon Volcano’s historical records available in various literatures attributed to the accounts of the Phivolcs.

Natural park

Although deadly, the enchanting volcano is the centerpiece of the Mayon Volcano Natural Park, which covers a total land area of 5,775.7 hectares.

It is first protected as a National Park in 1938 but in 2000 it was reclassified as Natural Park by virtue of Proclamation 412 signed on November 21, 2000.

The volcano is in the province of Albay and is shared by eight cities and municipalities, namely, Camalig, Daraga, Guinobatan, Legazpi City, Ligao City, Tabaco City, Malilipot and Santo Domingo.

The peak of the Mayon Volcano is the highest elevation in the entire Bicol region at 2,462 meters or 8,077 feet.

Heritage site

The Mayon Volcano is a central

property of the United Nations Education Scientific and Cultural Organization (Unesco) Albay Biosphere Reserve.

The Mayon Volcano Natural Park (MVNP) is included in the tentative list of Unesco World Heritage Site.

“For its height, unrivaled shape and remark ably sy mmetr ica l contours, Mayon Volcano was believed by the pre-Hispanic Bicolanos to be the abode of their ancestors and, thus, its confines were subjected to taboo, including violation of its natural resources and even climbing its peak. It was also held as the sacred mountain of both the deity Mayong and Gugurang, the supreme god of Bicolano animist beliefs,”the Unesco said in its web site.

The beauty of the volcano has inspired local artists, allowing culture and arts to flourish in the region. Because it is active, having erupted over 50 times in the last century, it has caused devastation in surrounding areas.

Never t heless, its f requent eruption has made people living around it more resilient to natural disasters.

Residents watch as Mayon Volcano spews ash on January 23 as seen from Legazpi City, Albay province. The Philippines’s most active volcano ejected a huge column of lava fragments, ash and smoke in another thunderous explosion at dawn, sending thousands of villagers back to evacuation centers and prompting a warning that a violent eruption may be imminent. AP/Bullit Marquez

Effect on biodiversity

Biodiversity profile

The natural park is home to 156 f loral species belonging to 36 families and 83 species of trees, including the single dipterocarp found in the area, locally known as baguatsa or gisok-gisok (Hopea philippinensis); and one near-threatened species from the rare family Nepentheceae, the pitcher plant.

Plant biodiversity found within the park is composed of 71 woody species belonging to 49 genera and 33 families. About 32 percent of these species are endemic, while others are indigenous.

It is a habitat for 104 species of land vertebrates, including 57 species of birds, 10 species of amphibians, 24 species of reptiles and 13 species of mammals.

Of the 13 mammal species, se ven a re endem ic of wh ic h three are listed as vulnerable: t h e Ph i l i p p i n e b r o w n d e e r, Philippine warty pig and giant golden-crowned f lying fox.

The bird fauna includes 37 endemic species with three species listed on the International Union for Conservation of Nature (IUCN) red list: the nearly threatened Luzon bleeding heart, vulnerable Philippine eagle-owl and the critically endangered Philippine cockatoo.

The 10 amphibian fauna are all endemic frog species with four listed in the IUCN red list: the nearly threatened Luzon fanged frog, Luzon forest ground frog and Guenther’s forest frog, and the vulnerable banded pygmy tree frog.

The MVNP also houses one endemic butterfly, seven endemic stick insects and nine endemic spiders in the registered insect and arachnid fauna.

These were the considerations submitted by the Philippine government to the Unesco to include the MVNP in the tentative list of Unesco World Heritage Site.

A separate profile prepared by the Biodiversity Management Bureau’s (BMB) Parks and Wildlife

Molten lava flows down the slopes of Mayon Volcano as seen from Legazpi City, Albay province, on January 30. Mayon’s lava fountaining has flowed up to 3 kilometers (1.86 miles) from the crater in a dazzling but increasingly dangerous eruption. AP/Bogie Calupitan

In general, a volcanic eruption has its benefits. Besides enhancing soil fertility, it also promotes tourism.”—Solidum Division of the Department of Environment and Natural Resources (DENR) revealed that there are several rivers and creeks within the MVNP. These are the Maagolgol, Bulawan, Bangliwan, Baranghaun, Bariw and Buang rivers; and the Miraya, Sabangan, Cabcab, Sidon, Uyangan, Pepe, Angtol, Ogob, Manadela, Mabalnos, Magsapit, Magasadit, Subangan, Tabiguian and Tancopan creeks.

Its biological features are also unique. The area is predominantly dominated by dwarf trees, grasses and few dipterocarp trees not fit for commercial purposes.

Wild pigs, civet cats and monitor lizards, likewise, thrive within the park.

Threats and danger

With the unpredictability of volcanic eruptions, such as the current activity of Mayon Volcano, Science Undersecretar y Dr. Renato U. Solidum Jr. for

d i s a s t e r - r i s k re du c t ion a nd climate change said there are strong possibilities that lava f lowing out of the crater would eventually block and spill over the gullies.

The impact of a volcanic eruption to its surrounding environment, Solidum added, depends on the mineral deposit emitted by the volcano. Although deadly, most of the time, these minerals emitted by the volcano are beneficial to the environment. The ash spewed by Mayon that is currently covering Guinobatan town would block the gullies and spill over to farmlands.

“Fortunately, there are no farms along the path of the lava,” said Solidum, who is also the officer in charge of the Phivolcs.

Areas covered by thick ash, lava, volcanic rocks and other debris would be rendered useless for agriculture for years, he added.

The lava would kill forest vegetation—trees, shrubs and grass— and cover vast portions of some

rivers and creeks, damaging the ecosystem.

The ashfall, which is common, during volcanic eruptions, often has little negative impact on the environment, except for the temporary air pollution.

In fact, Solidum said, later on the ash will be beneficial to the soil as the mineral deposit spread over vast land areas will replenish the soil cover with minerals and make it fertile in the long run.

Years after a volcanic eruption, the threat of lahar remains as heavy rains would eventually wash away downstream the debris accumulated on top of the hills, potentially “killing” rivers and adversely affecting other water bodies. However, again, Solidum said ecosystems affected by volcanic eruption will eventually recover as the soil becomes fertile.

“In general, a volcanic eruption has its benefits. Besides enhancing soil fertility, it also promotes tourism,” he said.

Unless covered by lava or lahar flow, trees in the forest would grow back, he added, agreeing to the observation that despite the frequency of Mayon’s eruption, its lush forest eventually bounces back and sustains life because of the fertility of the soil brought by the minerals sprinkled by the volcanic eruption.

A volcanic eruption often has an adverse environmental impact that threatens the biological diversity near the volcano, the country’s top biodiversity official said.

Director Theresa Mundita S. Lim of the DENR-BMB said as ashfall, lava or lahar affect forest and forest vegetation, animal wildlife tends to migrate or transfer to safer grounds. “ Volcanic er upt ion af fects biodiversity as it affects the vegetation and the animal wildlife species around the area that are not mobile,” Lim said.

“What is important,” she added, “is to protect the remaining biodiversity-rich areas which can serve as shelter and sanctuary of natural pollinators and seed dispersers that will evacuate from the affected areas.”

According to Lim, even a massive volcanic eruption will not cause the extinction of plant or animal species for as long as the same species continue to exist in other areas.

A reas t hat a re not a f fected by t he volca nic er upt ion, she said, w ill be the source of seeds a nd seed l i ngs of, hopef u l ly, nat ive spec ies of pl a nts a nd t rees t hat w i l l regenerate t he forest a nd lu re bac k a n i m a l w i ld l ife t hat were lost f rom t he er upt ion.

“On the positive side, the soil will be very fertile and will allow natural regeneration to take place more quickly,” she added.

In the case of affected areas in Albay, she said she expects the population or distribution of animal wildlife to drop, albeit temporarily.

A nima l species that cou ld not mo v e q u i c k l y, s he s a id like amphibians, f lightless insects and arachnids, could easily detect danger and transfer to safe grounds long before a volcanic eruption occurs.

“In any case, if there are other areas in Albay or the Bicol region where the same plant species can still be found, then we still have sources for propagation and restoration. All we need are the birds and the bees and bats,” she said.

“What is important is that people are aware of these areas so we can exert more effort in protecting these identified alternative natural gene-pool sites,” she explained.

A14 Monday, February 5, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

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editorial

Philippine interest rates: The reality

T

here are certain things in life where we are only interested in the result and not the process. For example, when we step on the gas pedal we want the car to start moving. We are not concerned about, or even aware of, the numerous mechanical and electronic interactions that must take place to insure the outcome.

There is nothing inherently wrong with that. However, by not knowing what is actually taking place, we might incorrectly think that the gas pedal is kicking the hamsters in the rear end and as they start running the car gets going.

Every public opinion survey on government performance asks about a person’s opinion on urgent national concerns. “Controlling inflation” is usually and rightly at or near the top of the list. Yet, those same surveys also ask about the performance of the “national administration,” controlling inflation and the number is never favorable by the majority.

By national administration we all mean the President, more specifically.

Yet the reality is that in the normal course of its duties and functions, the Office of the President—and by extension the Executive branch— has virtually no influence on the inflation rate. The Philippine inflation rate correlates with the global price of crude oil and the Philippine peso/US dollar exchange rate.

While we can’t do anything about global oil prices, there is some input that can be done with the peso and that is made by the independent Bangko Sentral ng Pilipinas (BSP). However, the BSP has correctly said countless times that by its mandate it will only move to stabilize peso rate movement and not to control that rate. The “hamsters” are not moving the Philippine inflation rate.

Recently, we are reading comments from the experts, both foreign and domestic, that the Philippines must be ready for an interest-rate increase because the US Federal Reserve (the Fed) may raise its rates in March. The Fed may indeed raise rates. But does that have an effect on Philippine interest rates as we are constantly told it has?

Here is the reality.

The mandate of the BSP is to “maintain price stability conducive to a balanced and sustainable economic growth”—keeping inflation under control. This is done by raising the “cost of money” through adjusting interest rates higher. The mandate does not say “maintain interest rates with the Fed.” Below are the facts—not the narrative.

The Fed did not change its benchmark rate even once from October 2008 until December 2016. The BSP changed its benchmark rates— both higher and lower—nearly a dozen times in that period. More important, the BSP moved rates higher only when the Philippine inflation rate moved to and above 4 percent.

Because monetary (interest rate) policy is the primary tool for the BSP to keep inflation in check, and because its inflation target has consistently been between 2 percent and 4 percent, higher interest rate comes when that target is exceeded.

But why wouldn’t or shouldn’t the BSP move its interest rates in harmony with the Fed? That is because the mandate of the Fed is completely different than the BSP. “The three key objectives for monetary policy in the Federal Reserve Act: Maximizing employment, stabilizing prices, and moderating long-term interest rates.” The BSP only looks at inflation when considering an interest-rate adjustment.

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February is National Arts month Atty. Jose Ferdinand M. Rojas II

RISING SUN

F

ebruary is abuzz with activities and events about the arts, creativity and self-expression. It is refreshing to see so many groups, agencies and individual artists and art lovers come together to celebrate the arts—a welcome departure from all the disheartening news in politics and current events.

The opening ceremonies for the National Arts Month events and activities will be held in Luzon, the Visayas and Mindanao. For Luzon, the celebrations happen in Angono, Rizal, the Art Capital of the country, on February 3. There will also be opening ceremonies in Roxas City, Capiz, and Cagayan de Oro. Following tradition, the NCCA’s National Arts Month celebrations will end with the Ani ng Dangal (Harvest of Honors) awarding ceremonies. It “recognizes artists who have earned national awards and accolades during the past year.”

To find out the programs that the NCCA has lined up under each of the seven arts, you could visit the web

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Still in relation to the arts celebrations this month, vloggers are being invited to join NCCA’s #NAMnamin Vlogging Contest. Shoot your video entry, post it on Facebook, and get a chance to win prizes.

Filipinos 16 years old and above are eligible to join the video-making contest. Participants are instructed to shoot a video of themselves, or with their friends, as they talk about Philippine arts. Vloggers must introduce themselves at the start of the video, and then proceed to tackle any of the seven arts. The video could also be about the theme (see above) or about the Filipino artists and the works of art that they (vloggers) love.

A

It would be overly optimistic for the Senate to aim to define what is fake news, especially since these days we can hardly define what is the truth—the lines have been blurred not only by traditional/social media but also the government, which has been accused as being the greatest enabler of manufactured information.

Senate Bill (SB) 1492 introduced by Sen. Joel Villanueva seeks to penalize any person who maliciously offers, publishes, distributes, circulates and spreads false news or information or causes the publication, distribution, circulation or spreading of the same in print, broadcast or online media. To be covered under this Act, such false news or information must cause or tend to cause panic, division, chaos, violence, hate or must exhibit or tend to exhibit a propaganda to blacken or discredit one’s reputation. In addition, the person doing any of the foregoing acts must have full knowledge that such news or information is false, or have reasonable grounds to believe that the same is false. Any

If the offender is a corporation, the president, chief executive officer and other responsible officers will suffer the penalty of imprisonment.

As aptly pointed out by the invited resource persons at the Senate Hearing, SB 1492 is too broad and does not clearly define what is false/fake news. P.S. Res. 315 of Sen. Antonio F. Trillanes and PS Res. 271 of Sen. Francis N. Pangilinan both urge inquiry in aid of legislation, but likewise fail to define what is “fake, erroneous, distorted, fabricated or misleading news and false information.”

It would be overly optimistic for the Senate to aim to define what is fake news, especially since these days we can hardly define what is the truth—the lines have been blurred not only by traditional/social media but also the government,

T. Anthony C. Cabangon

Editor in Chief

site at www.ncca.gov.ph or send an e-mail to paio@ncca.gov.ph. nnn

The annual celebration of National Arts Month started with the signing of Presidential Proclamation 683 in 1991, declaring February as National Arts Month.

The country’s “prime government agency for arts and culture,” the National Commission for Culture and the Arts (NCCA), led by its chairman National Artist Virgilio S. Almario, has lined up a series of events nationwide in celebration of the seven arts: architecture and allied arts, cinema, dance, dramatic arts, literary arts, music and the visual arts. All of the activities carry the theme, “Ani ng Sining, Alab ng Sining” (Harvest of the Arts, Flame of Art).

Founder Publisher

The opening ceremonies for the National Arts Month events and activities will be held in Luzon, the Visayas and Mindanao. For Luzon, the celebrations happen in Angono, Rizal, the Art Capital of the country, on February 3.

There will also be opening ceremonies in Roxas City, Capiz, and Cagayan de Oro.

Atty. Lorna Patajo-Kapunan

legally speaking

T the recent hearing of the Committee on Public Information and Mass Media on “fake news” chaired by Sen. Grace Poe, all bloggers, journalists and mainstream media were unified in their view that instead of crafting a new law, enforcement should be strengthened and supported but balanced by the need to protect the constitutionally guaranteed right of free speech and free expression. person who will be found guilty of committing any of the foregoing acts will be punished by a fine ranging from P100,000 to P5 million and imprisonment ranging from one year to five years. Stiffer penalties will be imposed if the offender is a public official.

In addition, SB 1492 proposes to penalize any mass-media enterprise or social-media platform that fails, neglects or refuses to remove false news or information within a reasonable period after having knowledge, or having reasonable grounds to believe, of its falsity. Violators will be punished by a fine ranging from P10 million to P20 million and imprisonment ranging from 10 to 20 years.

Here is the rest of the contest mechanics: n The video must be three to five minutes in length. n The video must be in English or Filipino (if using other Philippine languages, there must be English or Filipino subtitles). n Upload the video to any filesharing sites, such as Google Drive or Dropbox, and e-mail the downloadable link to ncca.paio@gmail.com.

Use the subject line “#NAMnamin VLOG!” with the name of the vlogger. n The video will be uploaded on the NCCA Facebook page, immediately after the deadline. Only then could the contributors encourage their friends to like and share the video, using the hashtags #NAM2018 #AniNgSining #AlabNgSining. Judging will be based on the number of likes and shares, as well as the quality of content and form.

The videos will be judged according to creativity relevance, and impact. n Deadline for submission of entries to the NCCA e-mail is on February 12, 2018. Sharing and liking on the NCCA Facebook page will be from February 13 to 20. n There will be three winners who will receive cash prizes and NCCA publications. This will be announced on February 26, 2018.

which has been accused as being the greatest enabler of manufactured information.

Many definitions have been offered. What I find useful as a guideline is John Nery’s (@jnery_newstand) 3D formula—“It is a deliberate act of fabrication and manipulation; disguised to look, sound, feel like the news, designed to deceive.” Clarissa David, professor of the University of the Philippines College of Mass Communications, makes a useful distinction between “disinformation” and “misinformation.” “Disinformation is designed to mislead, it is a purposely spread in a strategic way to persuade. Misinformation, on the other hand, is fueled by ignorance, not malice” (Rappler.com, January 26, 2018). But as aptly pointed out

by Prof. David, “at the source and initial spread, it is disinformation, but the wider it spreads, the sharing is no longer intentional. It is people genuinely believing they are spreading the truth.”

And then, of course, there is fake news and there is opinion. What may be recklessly dubbed as fake news may be legally defensible as an “opinion,” which opens a whole new can of worms.

But that is only my opinion. And I may disagree with others’ opinion, but I will certainly defend ones right to say (or publish) it.

Opinion BusinessMirror

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Integrated thinking and reporting for SMEs

What PPP can learn from Tough Mudder

By Alberto Agra

PPP Lead

Paul Thompson

DEBIT CREDIT Part One

T

he world’s largest companies are often regarded as leading the way for small- and medium-sized entities (SMEs).

But that’s not how it is or at least not how it has to be.

The evidence, from government statistics through to academic research, demonstrates that SMEs not only have the greatest impact on economy and society but they are also the primary drivers of innovation and change. And, where SMEs lead in product and service innovation, they can also lead in the innovation for integrated reporting.

There’s a fast-growing body of compelling evidence on the substantial benefits organizations gain from integrated thinking and reporting. But what about the benefits for SMEs? Perhaps most strikingly, the B20 (the G20’s business arm) recommended promoting integrated reporting as a key means of improving SME reporting with a view to building trust around past and future performance.

There is a clear, concise and persuasive case why SMEs and their stakeholders, from owner managers through to end consumers, stand to benefit greatly from considering integrated thinking and integrated reporting.

SMEs globally account for the majority of private sector economic activity, employment, social impact and environmental footprint. In their midst are tomorrow’s largest, most influential and impactful companies. Amazon, Alibaba, Uber and Didi Chuxing were yesterday’s SMEs. But unlike many larger companies, SMEs often have the latitude to take a long-term view and pursue objectives above and beyond simply profit. Many SMEs are run by owner managers who see business as integral to and a reflection of their lifestyle and values. This lends itself to a way of thinking, and corresponding reporting, that stresses the long term over the short term, the future over the past and principles over profit.

Integrated reporting is a generally recognized international framework that helps SMEs better understand and better communicate how they create value. It provides a road map for SMEs to consider the multiple capitals and connectivity that make up its value creation story. This makes an integrated report much more than a conventional annual report—it’s a more complete corporate report.

But it need not demand much, if any, more effort to compile. And

perhaps, more important, it will help SMEs understand the core drivers of their business so they can implement a business model that will help them grow.

SMEs, like larger entities, leverage a range of resources and relationships to create value. The International Integrated Reporting Framework calls these “capitals.”

There are six capitals, including the familiar, financial and the less familiar, manufactured, intellectual, human, social and relationship and natural capital. Properly nurtured, these capitals can release value over time while simultaneously growing their capacity as a store of value.

How these capitals can operate in an SME are detailed in International Federation of Accountants (Ifac) Creating Value for SMEs through Integrated Thinking: The Benefits of Integrated Reporting (http:// www.ifac.org/publications-resources/creating-value-smes-through-integrated-thinking).

I dwelled on the impact and value of IR on SMEs with the audience who attended the Board of Accountancy sponsored symposium “Integrated Thinking and Reporting for SMEs” on January 3 in the Philippine International Convention Center. The continuation of my article will focus on more interesting issues.

To be continued Paul Thompson is a European Federation of Accountants and Auditors director and a consultant dedicated to thought leadership and development of the global accountancy profession. From 2004 to 2016, Thompson worked for Ifac latterly as director, Global Accountancy Profession Support, a role that extended to overseeing the Ifac Global Knowledge Gateway, research and innovation, and activities in support of small- and medium-sized practices and professional accountants in business.

This column accepts contributions from accountants, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. These can be e-mailed toboa.secretariat.@gmail.com.

Continued from A1

B

eing a public-private partnership (PPP) advocate and an active obstacle sports enthusiast, this columnist cannot help but compare the vision and values of PPP and TM. Previously, he wrote about Traversing PPPs is like a Spartan Race.

Aroo!!! right after he joined his first obstacle course race in September 2016.

PPPs and TMs are the same in at least five dimensions.

(1) Shared Vision. PPPs and TM aim to have better quality of life. In PPPs, all projects have this as its true north. Government projects, undertaken with private-sector proponents (PSPs), are all geared for the people. For its part, TM wants to “grow” the “Mudder Nation into a Global Tribe that lives courage, personal accomplishment, teamwork

By Ross Douthat

O

ne important task for a columnist is figuring out which ideas can be usefully argued over and which ones can’t.

The responses to my column last week urging Democrats to negotiate with Stephen Miller and Donald J. Trump on immigration, because a deal hammered out with restrictionists would have more durability and democratic legitimacy, were helpfully divided between the first category and the second.

The argument-ending rejoinders ran as follows: Trump is a racist, Miller is a racist, and making major deals with them normalizes presidential bigotry. Since I agree that Trump’s race-baiting is disgraceful, I respect that rejoinder, and I don’t think my own arguments are likely to dislodge people from a firm point of moral principle.

But another kind of response is worth disputing. Instead of making a moral judgment, it purports

to make an empirical one, implying that the serious case for immigration restriction is all but nonexistent, and that negotiating with restrictionists is therefore like negotiating with flat-earthers.

I want to challenge this view by expanding on two points that I mentioned last week, both of which offer reasons to regard immigration as a normal policy question with costs as well as benefits to any course you choose.

First, as mass immigration increases diversity, it reduces social cohesion and civic trust. This is not a universal law, as economics writer Noah Smith has pointed out; there are counterexamples and ways to resist the trend. However, it is a finding that strongly comports with the real-world experience of Europe and America, where as cultural diversity has increased so has social distrust, elite-populist conflict and the racial, religious and generational polarization of political parties.

Moreover, the trust problem is not a simple matter of racist

and fun.” All these partake of better quality of life.

(2) Toughness needed. To hurdle political, social, economic, environmental and spatial obstacles in PPPs, resiliency is needed. PPP projects that may last for 50 years must be future-proofed so that the avowed vision of PPPs is achieved. For mudders (and mudders-to-be), one must be tough or must train to be tough.

(3) “Tougher together.” “The

Power under control Siegfred Bueno Mison, Esq.

THE PATRIOT

I

N a social-media site under the hashtag #PassionPurposeProductivity, author and inspirational speaker Francis Kong shares a series of inspiring and insightful messages. In one post, Kong said that gentleness can be defined as “power under control.” He adds, “Do not mistake meek people for weak people. Always be respectful. It is a mark of maturity and power.” As we go through life, we will find ourselves faced with difficult situations—evicting a delinquent tenant, firing an employee or simply being expected to fight back in the face of injustice—all of which present us with a hard choice: to be kind or to be unkind.

Author and businessman Dale Carnegie said, “Perhaps you will forget tomorrow the kind words you say today, but the recipient may cherish them over a lifetime.” Everything we say or do, even those that are difficult, can be done with kindness.

Think of how effective peaceful rallies can be when compared to violent revolts. As novelist Henry James said, “Three things in human life are important: the first is to be kind; the second is to be kind; and the third is to be kind.”

I have been reminded of such kindness during recent weeks.

When Philippine Airlines (PAL) launched Star Awards, its employee recognition award, I was part of a panel interview of one of the candidates for the Assistant Manager of the Year. The candidate, Ms. Rosario

The necessary immigration debate New York Times News Service

Monday, February 5, 2018 A15

natives mistrusting foreigners, since social trust is often weakest among minorities—which is one reason the most diverse generation in American history, the millennials, is also the least trusting.

So you can see the political effects of distrust even if you ignore the Trump Republicans entirely: It’s one reason campus politics are so toxic, why Democrats struggle to keep their diverse coalition politically engaged and why the BernieHillary contest produced so many cries of racism and sexism.

Then linked to these ethnocultural tensions are the tensions of class, where mass immigration favors stratification and elite selfsegregation. In the United States, as in France and England, regions and cities with the largest immigrant populations are often the wealthiest and most dynamic. But this doesn’t mean that poorer regions are dying from their own xenophobia, as is sometimes suggested. The hinterlands are also filled with people who might want to move to wealthier re-

Esperanza Bartolome, attributed all of her accomplishments during her 44 years in PAL (working during off days, taking a Christmas flight, 17 straight years of perfect attendance, 225 passenger appreciations in six months, etc.) to the grace of God. When asked for the kind of legacy she wanted to leave in PAL after she retires, Bartolome chose to disregard her personal accolades. Instead, she only hoped to be remembered as a person who inspired her colleagues to become better people.

She believed that her legacy should transcend the interests of PAL, adding that training should always be done in the interest of helping others become better people. And for me, being a better person entails kindness and gentleness.

In Philippine politics, it is almost

In the United States, as in France and England, regions and cities with the largest immigrant populations are often the wealthiest and most dynamic.

But this doesn’t mean that poorer regions are dying from their own xenophobia, as is sometimes suggested. gions (or who used to live there) but can’t because an immigrants-andprofessionals ecosystem effectively prices out the middle class.

It is a testament to immigrants’ grit and determination that they can thrive working long hours for low wages while living in crowded housing with long commutes. But the social order of, say, the Bay Area or greater Paris is not one that can serve for an entire country—and it ill-serves not only lower-middleclass natives but also the descendants of the immigrants themselves, whose ability to advance beyond their parents is limited by

PPPs and TM aim to have better quality of life. In PPPs, all projects have this as its true north. Government projects, undertaken with private sector proponents, are all geared for the people. For its part, TM wants to “grow” the “Mudder Nation into a Global Tribe that lives courage, personal accomplishment, teamwork, and fun.” All these partake of better quality of life.

strength of one person is nothing compared to the power of a team.”

Seemingly insurmountable obstacles—Everest, Pyramid Scheme, Berlin Walls, Electroshock Therapy and Ladder to Hell, to name a few—become surmountable with mudders helping mudders. TM obstacles are designed to encouraged group participation and camaraderie. One needs others to complete the course. This is also the very essence of PPPs. The government/implementing agency (IA) and PSP need each other to reach the finish line.

In Philippine politics, it is almost as if there is no space for kindness. Recently, President Duterte and Ombudsman Conchita Carpio Morales have begun crossing swords once again. Months ago, Morales said Duterte’s goad of killing people was unacceptable.

In response, Durerte told Morales to “shut up” and “not play God.” as if there is no space for kindness.

Recently, President Duterte and Ombudsman Conchita Carpio Morales have begun crossing swords once again. Months ago, Morales said Duterte’s goad of killing people was unacceptable. In response, Durerte told Morales to “shut up” and “not play God.” In another instance, when Duterte ordered the Ombudsman and the Commission on Human Rights to seek his clearance before investigating errant police and military officers, Morales said, “Anong pakialam niya?” (What’s his business?)

In retaliation, the Ombudsman was not invited to the President’s State of the Nation Address.

The latest clash between the President and the Ombudsman is due to the refusal of Morales to enforce Duterte’s suspension order against Overall Deputy Ombudsman Melchor Arthur Carandang.

Claiming it is unconstitutional, Ombudsman Morales said that her office cannot “seriously place at risk the independence of the very office, which she has pledged to protect on

a continued arrival of new workers who compete with them for jobs and wages and housing.

Thus our rich and diverse states also often feature high poverty rates when their cost of living is considered, while second and third-generation immigrants often drift into the same stagnation as the white working class. …And they do so out of sight and mind for the winners in this system, who inhabit a world where they only see their fellow winners and their hardworking multiethnic service class. Which, in turn, encourages them toward mild contempt for their fellow countrymen who don’t want to live under a cosmopolitan-ruled caste system, who feel alienated from the Californian or Parisian future.

For some pro-immigration Republicans this contempt is Ayn Randian: We’ll all be better off with more hardworking immigrants and fewer shiftless mooching natives. For proimmigration liberals it’s the predictable cultural triumphalism: The arc

(4) Innovation also. The very names of the obstacles—like Block Ness Monster and Skid Marked (obstacles you will witness, better yet, conquer with others, this year) denote creativity with a purpose. Notably, the ideation of TM obstacles is not within the sole purview of TM owners. TM solicits and rewards ideas submitted by mudders. Innovation is also a hallmark of PPPs. PPP by itself is an innovation. The IA and PSP themselves must likewise innovate, and think and work outside the box.

(5) Challenge, not a race. One of the matters emphasized during the launch of TM Philippines was the nature of TM, i.e., TM challenge series, which are untimed events, and are not about getting ahead, competing against other racers and leaving others behind. TM 5k, Half and Full are social challenges where the end goal is finishing together. For PPPs, the IA and PSP are partners, not competitors, working toward the shared vision.

Let us all be part of that Global Tribe of partnerships, teamwork and fun. See you in July. Let us get muddy together.

the strength of the constitutional guarantees which the High Court has upheld.” Speaking on behalf of the President, Presidential Legal Adviser Salvador Panelo said, “Anyone who disagrees with the suspension is free to question the same before the courts.”

Here, the gentleness of the responses evokes the feeling of controlled power. There were no foul words used; no insults or tirades.

Both were relatively meek responses compared to the initial exchanges between the parties.

In the Bible, Mark 13:11 says, “Whenever you are arrested and brought to trial, do not worry beforehand about what to say. Just say whatever is given you at the time, for it is not you speaking, but the Holy Spirit.” Whenever we are harassed in any situation, let us choose to be meek. Francis Kong said that meek people have an inner strength that makes them much stronger than those who choose to be rude and disrespectful to hide their insecurities.

I remember Bartolome saying that being gentle is natural to all human beings. I can even add that being kind is inherent to all Filipinos, at times, even to a fault. This is our culture and our strength. It does not cost us anything to be gentle and kind. The kindness we show to each other will not only improve the other person but ourselves, as well. Let’s exercise our power under control. Let’s choose to be kind.

For questions and comments, please e-mail me at sbmison@gmail.com.

of history is long, but thanks to immigration we won’t have to cater to heartland gun-clingers any longer.

In both cases there’s a fantasy of replacement that’s politically corrosive, and that’s one reason Trump is president and Jeb and Hillary are not.

Now all of the foregoing is onesided. It leaves out the real advantages of immigration, economic and humanitarian, which are part of the policy calculus, as well—as is the recent decline in illegal immigration, and the fact that the problems I’ve identified are more manageable in America than Europe. Hence my own view that keeping current immigration levels while bringing in more immigrants to compete with our economy’s winners and fewer to compete for low-wage work represents a reasonable middle ground.

But the calculus is not simple, a middle ground is actually worth seeking, and recent immigration plays a role not only in America’s greatness, but in our divisions and disappointments, as well.

2nd Front Page BusinessMirror

A16 Monday, February 5, 2018

SM hotel and conventions unit to invest in serviced apartments

T

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

HE robust domestic market continues to feed the properties of SM Hotels and Conventions Corp.

(SMHCC), even as it develops its foreign travelers traffic.

In an e-mail interview with the BusinessMirror, SMHCC Executive Vice President Peggy Angeles said “the primary market for most of our properties is still the local market. But there has been a steady increase in bookings coming from the United States, China, South Korea, Japan and Southeast Asia attributed to our continuous efforts in developing these markets.”

She added that strong growth in Chinese tourists in the Philippines has mainly benefited SMHCC’s leisure properties like Pico Sands Hotel in Nasugbu, Batangas and Taal Vista Hotel in Tagaytay City. “Taal Vista Hotel has recently been a popular stopover for Chinese tour groups for its lunch buffet cultural show.”

Last year Chinese arrivals grew by 43.3 percent to 968,447, helping lift total foreign visitor arrivals

in the Philippines to 6.62 million.

(See, “Arrivals up 11 percdnt in 2017 as China delivers on vow,” in the BusinessMirror, January 30, 2018.)

This developed as officials disclosed that the company will be investing P6.3 billion to expand its portfolio, doubling its current room inventory and increasing its leasable convention space by 2020.

This includes branching out to the serviced apartment market.

In a news statement, SMHCC President Elizabeth Sy said the company “will be expanding in growth areas, which it deem can sustain the establishment of guestroom facilities. These include new hotels and a foray into the serviced-apartment market.

These facilities will be located within the lifestyle cities being developed in key areas in the country by our parent company

₧6.3B

The amount that SMHCC will invest to expand its portfolio, doubling its current room inventory and increasing its leasable convention space by 2020 SM Prime Holdings Inc.” She also said the addition of new SMX Convention Centers in key cities further cements SMHCC’s position as the country’s premier conventions and events destination.

Currently under way are six hotels in Quezon City, Iloilo, Angeles, Pasay, Bacolod and Baguio.

These hotels have an average of 200 rooms each. In Quezon City, specifically, “the multi-tower North Edsa project is one of the current developments initiated by our parent company SM Prime Holdings Inc. One tower is earmarked for a 239-room hotel, which is slated to be completed by the first quarter of 2019,” Angeles said.

She added the hotel will be operated by the Carlson Rezidor hospitality group under the Park Inn by Radisson brand. But she declined to reveal the brands for the company’s other hotels in development due to ongoing discussions with

potential operators.

With the allotted investment, “SMHCC developments will generate thousands of jobs from the onset of the construction and close to a thousand when the properties operate, definitely helping the local community where the developments are located,” Angeles said.

As for the serviced apartments, she said “we’re looking at a few locations but nothing has been finalized. The operator has yet to be identified.”

According to a global industry report by TAS Alliance for 2016/2017, while serviced apartments in Asia have been increasing, reaching almost 80,000 units in 2016, it still pales in comparison to the Americas (500,000 units) and Europe (125,000). The report also indicated some 62 percent of business travelers use serviced apartments, followed by those on temporary projects or assignments overseas (49 percent), and those relocating permanently (35 percent).

Along with the hotel projects, the company is also “strengthening our foothold in the conventions sector with new additions to our current portfolios of convention and trade halls,” Angeles added.

A new SMX Convention Center is being constructed adjacent to the Park Inn by Radisson Clark in Angeles, Pampanga, with a leasable space of 3,800 square meters (sq m). The facility will have six function rooms, complemented

by 14 smaller meeting rooms.

Upon completion, SMX Convention Centers will have more than 41,800-sq-m leasable convention space across key cities— Manila, Bonifacio Global City in Taguig, Davao and Bacolod.

SMHCC also operates Megatrade Hall in SM Megamall, Cebu Trade Hall in SM City Cebu, and Sky Hall Seaside Cebu.

Me a nw h i le, of f ic i a l s a l so revealed the company will be spend ing some P510 mi l l ion to renovate its existing hotels, namely, Taal Vista Hotel, Radisson Blu in Cebu and Pico Sands Hotel. The renovation program is part of the company’s four-year development plan, and will be undertaken in phases—starting in April and scheduled for completion by 2020.

Angeles said: “The renovation plans include the 129 rooms of Ta a l Vista Hotel ’s Mounta in Wing scheduled to commence in the second quarter of 2018 and is anticipated to be completed before the end of the year. Also to be renovated are all 400 rooms of Radisson Blu Cebu phased over a couple of years, followed by Pico Sands hotel’s refurbishment in 2019.”

SMHCC was established in April 2008 to develop and manage the hotel and convention properties of SM Prime. Shares of the parent firm closed P36.95 last Friday, slightly higher than Thursday’s close of P36.50.

LABOR GROUPS HOPE PROPOSED E.O.WILL GET DUTERTE’S NOD

By Samuel P. Medenilla

L

@sam_medenilla

abor groups will have a say on which positions in a company may be subjected to contractualization under their proposed executive order (EO), which they hope President Dutete will sign this week.

In a statement, the Trade Union Congress of the Philippines (TUCP) disclosed the proposed EO will prohibit contractualization if it contravenes with the rights of workers on security of tenure, organizing themselves into unions and to bargain collectively.

The EO defines security of tenure as the direct hiring relationship between principal employer and the employee.

The TUCP said companies, which are seeking to be exempted from the prohibition of the EO, must get the approval of the National Tripartite Industrial Peace Council (NTIPC).

The NTIPC serves as the advisory council of the Department of Labor and Employment (DOLE) for its new policies. It is comprised of representatives from the government, private sector and labor groups.

“Exemptions to the prohibition of contractualization See “Labor groups,” A2

NO MELTDOWN A teller counts peso bills in a Makati City bank. Reports said Bangko Sentral ng Pilipinas Governor Nestor A. Espenilla Jr. last Thursday dismissed suggestions there could be a meltdown of the peso, which hit a two-month low against the US dollar, saying the local currency is being supported by healthy economic fundamentals. NONIE REYES

RCEP talks in Indonesia focus on concessions, crafting of sensitive list Continued from A1

He explained these are the products that will most likely suffer if the country allows its imported counterparts, which are usually priced cheaper, to enter the domestic market. “ T here are cer tain products, mostly agricultural—in many countries, including the Philippines—that [local] producers might find it difficult to comp ete a g a i n st c he ap er imported products. “ºThe sensitive list is like a limited list in which the reduction of tariff is longer, or the reduction is not immediate to give the industry the time to adjust,” Manzano

told the BusinessMirror.

Lead negotiators are also modifying concessions and flexibilities that will be put in place once the trade deal is concluded, Lopez said. He noted these concessions are crucial for the negotiating countries to reach a consensus on the proposed agreement.

Ma n za no sa id some RCEP negot i at i ng cou nt r ies m ight demand the Philippines to impose z ero r ates on some of its tariff lines if it wishes to place a number of its agricultural products under the sensitive list. “Concessions could be [that some] percent [of your] tariff lines [should be] zero,” he said.

This is why he sees a path shrouded with uncertainty ahead for the RCEP. “It should have been finished last year, but you have 16 countries together—each one with its own trade agenda—it should take [longer time]. It is not easy. It depends,” Manzano said, adding negotiating countries have yet to delve on the nitty-gritty of the trade deal— that is, trade in services.

The former tariff commissioner also said there is definitely pressure on the side of the China-led RCEP with the progress gained by its counterpart TPP in January. He said “there is a little bit of a race,” but pointed out it is the RCEP that is trailing the TPP.

As for Lopez, he said he is “moderately confident” the RCEP will be finalized this year. The 10 memberstates of the Asean, Australia, China, India, Japan, South Korea and New Zealand have all committed to conclude the proposed agreement this year.

To be able to finalize the trade deal, Asean member-states will need to consolidate its free-trade agreements (FTAs) with its trading partners and build new economic linkages between those that do not have bilateral FTAs with each other.

In a joint statement last November, the RCEP negotiating countries vowed to continue with the talks to achieve “a modern,

comprehensive, high-quality and mutually beneficial economic pa r t nersh ip a g reement t h at would support an open and enabling trade and investment environment in the region.”

In 2016 the RCEP economies accounted for almost half of the world population, 31.6 percent of global output, 28.5 percent of global trade and about 20 percent of the global foreign direct investment inflows.

The RCEP will cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, e-commerce, dispute settlement and other trade issues.

www.businessmirror.com.ph

PHL factory output likely slowed in December

By Bianca Cuaresma @BcuaresmaBM

P

hilippine industrial production likely slumped anew in December 2017, Moody’s Analytics said, with persistent weakness seen up until the middle of 2018.

In its Asia Pacific Economic Preview, the research arm of Moody’s Corp. said the country’s industrial production last December could have contracted by 12.4 percent.

“The downswing in industrial production growth likely deepened last December.

Industrial production likely fell 12.4 percent year-on-year, after an 8.1-percent decline last November.”

This is after the industrial sector’s performance—reported as the volume of production index (VoPI) by the Philippine Statistics Authority monthly—declined by 8.1 percent in November 2017.

While declines in the sector have been significant, Moody’s Analytics showed no sign of concern regarding the health of the industrial sector, saying the contractions were likely caused by its outperformance in the previous year.

“The downswing in industrial production growth likely deepened last December. Industrial production likely fell 12.4 percent year-on-year, after an 8.1-percent decline last November. Industrial production has been in a downturn since the start of 2017, much of which reflects the high base from one year earlier,” Moody’s Analytics said.

The think tank also said they expect the impact of this high base to fade within the year, and is likely to lead to firmer industrial production growth by mid-2018, especially with public works set to scale up during the year.

Declines in the country’s industrial production in November 2017 was attributed to the contraction in six major sectors lead by production of chemical products—which declined by 62.7 percent.

The steep decline in the production of chemical products during the month outpaced the increments of 14 major sectors.

Three other major sectors that contributed to the shortfall in VoPI were tobacco products, with a decline of 48.3 percent, textiles contracting by 33.8 percent and footwear and wearing apparel which was down by 3.9 percent.

The huge decline in production in the tobacco sector was attributed to the wait-and-see stance of tobacco makers, as they remain cautious over the higher excise tax coming into 2018.

New China. . .

Continued from A1

classification system for high-end foreign talents,” the POEA said in its five-page advisory.

Qualified applicants will be given a confirmation letter within five days after submission of the online form, allowing them and their families to apply for the “R” Visa at the Chinese Embassy or Consulate offices.

Those who will pass the screening process will be entitled to a multiple-entry visa valid from five to 10 years, which will allow its owner to stay in China for 180 days for each entry.

The POEA earlier said it is considering China as a new market for overseas Filipino workers since some categories of foreign workers are paid well there.

The POEA, however, clarified that China remains a closed market for Filipino household service workers (HSW) due to its existing law preventing Chinese nationals from hiring foreign HSWs.